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Why We Shouldn’t Worry About Inflation Just Yet
It is hard not to notice the continuing climb in gas prices and everyday expenses as the economy reopens.
Stimulus checks, unemployment checks, and savings are prompting more people to spend their money as we slowly begin to return to pre-pandemic levels.
All these incentives are prompting people to spend more which is causing prices to climb.
Inflation occurs when there is a product or service that is in high demand and consumers are willing to pay more for that item.
For example, now that states are opening back up and more people get vaccinated every day, more people are starting to travel again and return to work, driving the price of gas.
According to the US Department of Labor, “Last month, inflation accelerated at its fastest pace in more than 12 years as the economic recovery kicked into gear.”
This week’s report showed an increase in prices from everything from food and clothes to housing.
“Over the past 12 months, consumer prices have jumped 4.2 percent — the fastest rise since a 4.9 percent gain in the 12 months that ended in September 2008.”
This report reflected what many economists were concerned with from the beginning that as demand increases so will inflation.