lol, random nameless economists say things "should be" back to normal even with covid, supply chain issues, and worker disengagement persisting. I can see why people trust weathermen over climate change scientists. Headlines and details generally suck in these articles. Calm down everyone...rando experts say so, and it's too hard to spell out why they do what they do! What exactly is the "inflation" these economists are speaking of?
Percentage of those citing inflation has jumped 20 points since the beginning of 2021 WASHINGTON, D.C. (Jan. 11, 2022) – The NFIB Small Business Optimism Index increased slightly in December to 98.9, up 0.5 points from November. Twenty-two percent of small business owners reported that inflation was their single most important problem encountered in operating their business. Price raising activities have reached levels not seen since the early 1980s when prices were rising at double-digit rates. “Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive,” said NFIB Chief Economist Bill Dunkelberg. “Inflation is at the highest level since the 1980s and is having an overwhelming impact on owners’ ability to manage their businesses.” Key findings include: Twenty-two percent report inflation as the single most important problem operating their business, a 20-point increase from the beginning of 2021 and the highest level since Q4 1981. Owners expecting better business conditions over the next six months increased three points to a net negative 35%. Owners remain pessimistic about future economic conditions as this indicator has declined 23 points over the past six months. Forty-nine percent of owners reported job openings that could not be filled, an increase of one point from November. According to NFIB’s monthly jobs report, a net 48% (seasonally adjusted) of owners reported raising compensation, up four points from November and a 48-year record high reading. A net 32% plan to raise compensation in the next three months. Thirteen percent cited labor costs as their top business problem, up three points and a 48-year record high reading and 25% said that labor quality was their top business problem. Fifty-seven percent of owners reported capital outlays in that last six months, up two points from November. Of those making expenditures, 41% reported spending on new equipment, 25% acquired new vehicles, and 19% improved or expanded facilities. Six percent of owners acquired new buildings or land for expansion and 13% spent money for new fixtures and furniture. Twenty-nine percent plan capital outlays in the next few months, up two points from November and two points higher than the 48-year average. A net 1% of all owners (seasonally adjusted) reported higher nominal sales in the past three months. The net percent of owners expecting higher real sales volumes increased by one point to a net 3%. The net percent of owners reporting inventory change increased four points to a net 7%. Thirty-six percent of owners report that supply chain disruptions have had a significant impact on their business. Another 30% report a moderate impact and 21% report a mild impact. Only 11% report no impact from recent supply chain disruptions. A net 9% of owners viewed current inventory stocks as “too low” in December, down six points from November. A net 8% of owners plan inventory investment in the coming months, down two points from November but five points above the 48-year historical average. The net percent of owners raising average selling prices decreased two points to a net 57% (seasonally adjusted). Unadjusted, 5% of owners reported lower average selling prices and 58% reported higher average prices. Price hikes were the most frequent in wholesale (85% higher, 0% lower), construction (74% higher, 5% lower), and retail (70% higher, 7% lower). Seasonally adjusted, a net 49% plan price hikes (down five points). The frequency of reports of positive profit trends increased three points to a net negative 14%. Among the owners reporting lower profits, 29% blamed the rise in the cost of materials, 22% blamed weaker sales, 17% cited labor costs, 10% cited the usual seasonal change, 8% cited lower prices, and 4% cited higher taxes or regulatory costs. For owners reporting higher profits, 63% credited sales volumes, 11% cited usual seasonal change, and 15% cited higher prices. Two percent of owners reported that all their borrowing needs were not satisfied. Twenty-six percent reported all credit needs met and 62% said they were not interested in a loan. A net 4% reported that their last loan was harder to get than in previous attempts. Zero percent reported that financing was their top business problem. A net 4% of owners reported paying a higher rate on their most recent loan.
So true. Inflation post pandemic is a global issue. Inflation rate is by no means solely a U.S. concern. A Pew Research Center analysis of data from 46 nations finds that the third-quarter 2021 inflation rate was higher in most of them (39) than in the pre-pandemic third quarter of 2019. In 16 of these countries, including the U.S., the inflation rate was more than 2 percentage points higher last quarter than in the same period of 2019. https://www.pewresearch.org/fact-ta...he-u-s-has-seen-one-of-the-biggest-increases/
all inflation spikes and recessions in US history have been temporary. the word means nothing they still happen and make it hard on people in lower income classes.
It’s amazing how few people paid attention to the economics 101 supply and demand lecture. That said you are right that it still kicks people in the a$$ when it happens. I think if there’s a lesson here it’s that we should get back to manufacturing our own crap and we should learn how to get better and better at harvesting energy not from the Middle East and Russia.
Are you under the impression that we didn't have inflation when we made our own stuff? The global system of trade has created record low inflation for a generation. It's not like US-based supply chains are operating any better than international ones, so I'm not sure what problem this solves exactly. Right now, the whole world has to shut down to create supply chain problems. In your version, a small problem in the US would have the same effect. If you manufacture things here, everything will be more expensive and you'll create way more inflation than we're getting now - and it will not be transitory.
This isn't true. Most inflation is permanent - if you have 3% prices increases in a year, that tends to be the new baseline going forward - that's how most monetary inflation works. However, if you have transitory inflation, it means that once the supply congestion is alleviated, prices should actually go back down. We saw this in reverse with the 2020 economic crash - it was a transitory thing through artificial shutdowns that quickly unwound itself unlike most recessions that have permanent effects and lower the starting baseline. Think about it in regards to rental cars. During Covid, the rental car agencies sold off half their fleets because they didn't need to keep unused depreciating assets. Now, demand shot back up but they didn't have the supply, so they have raised prices. Once they rebuild their fleets, those prices will come down, creating deflationary price pressures. Whether that happens across the economy is unknown because we do have some non-transient elements like rising wages, but that's the idea of transitory inflation. It's not that you're going to have ongoing future inflation - it's that the pressures creating current inflation will actually unwind. You see that in energy prices all the time as another easy example - it's stripped out of core CPI for that exact reason, but now that type of inflation is occurring across the board due to broken supply chains.
And Bernie. But his policies were naive and relied on tariffs as the end all solution. Tariffs just tax Americans on sh$t they need. It’s not an investment in American industry like Build Back Better inspires to be with the energy industry. Trump is just like any other autocrat who says he fixes something because he says he fixed something. He never had an actual plan other than using peoples real anxieties to gain power and use that power to glorify himself. Trump- “I built 20 years worth of industry because I taxed Americans an extra 25 cents per pair of socks from China in 2019.” - America First Policy I can’t believe you really want to even go there with this point and argue on behalf of Trump’s false profit BS. Trump is a late night infomercial. A Jim Adler who sees that there is a market for drunk drivers who get in wrecks that want to try and sue their way out of accountability instead of just sobering up or paying for a damn Uber. He’s a highlight marker exposing the right wing nanny state who lack the ability to put in hard work to make a better life instead of relying on daddy’s inheritance. You want to argue on behalf of Trump’s false promises of bringing back of industry lost over 40 years starting with Reagan, Bush Sr. and Clinton with the blink of an eye with a couple of silly Tariffs???… let’s go there.
You answered my point for me. The current inflation situation is based on supply and demand because of the pandemic. It’s economics 101. We don’t manufacture anything here so we are susceptible to inflation based on another countries policies and health of their workers. Our demand stayed the same but the supply decreased because of other countries being able to deliver. Yet since Reagan, we’ve had the supply whenever we demanded it at a low cost due to supply competition around the world. We’ve all benefited from a globalized market place. Yet we are more vulnerable at the same time. I personally would like to see America not create everything here but have investment in key areas that’ll allow us to export more in key areas like energy. We can also still have infrastructure in place to supply ourselves with basic goods and services if needed. Americans can learn to start doing basic things like growing a handful of vegetables and re-using things that don’t need to be single use. This is a moment in time where America can become more resilient in a micro since and also more aggressive and innovative in the macro approach for competing in industry.
Ronald Reagan and Bill Clinton’s America actually. Both Trump and Biden have campaigned on this issue so I think just about everyone realizes that it’s an issue that we are so reliant on importing everything and we aren’t innovating enough to be exporting in a way that grows our economy long term.
I don't think our situation is remotely close to basic economics 101. Our money supply is not wholly controlled by the Treasury or Fed. The Dollar acts as a world reserve currency where we allowed some foreign banks to increase supply through their own shadow ledger system, mostly because no one at the Fed could begin to control what was happening to the Dollar outside our borders. In traditional economics 101, we went through Triffin's Dilemma in the 70s, where our government cant correct trade imbalances as easily as other nations, which exposes the double edged nature of easily printing away money. It consigns Americans as spenders and debtors. Post 08, the fed has cordinated with other g8 nations for producing ultralow interest rates. I don't think there's any hard proof "they saved the world economy" when we haven't recovered from 08 levels. Obama era decisions to did foster recovery, but it landed us in this new normal where asset prices are decoupled from Main Street and weath inequality has steadily grown ever since. One result of global bank coordination is that debt to gdp in Japan, Europe, Canada, Australia, and China are as bad to worse than ours. Furthermore, Inflation is steadily taking over the world. Moving chip manufacters domestically might improve one bottleneck, but they're more hindsight fixes to an anti fragile system that worked great during boom times. Inflation elsewhere will def increase foreign pressures to compete at prices lower than our domestic producers, but that assumes there aren't any distribution bottlenecks. It's definitely complex and murky, and in no way Basic. The fed and others who claimed transitory effects were all wrong last year. "Oh it was energy!" Wacked that mole, then it was used car prices. Energy seemed solved but it came back, and now its labor shortages and food hikes. This will take longer than people are assuming. Heck, i personally believe the economy is weak enough to revert back to deflation, but I wont put serious money on the when anytime soon.
