Inflation is Very Bad Right Now But It Is Going According To The Script

The inflation plan is going according to script in the Covid era. The rate of inflation is high right now and it should be enough to cause a lot of concern too, however, this had been expected by the economists and the government for quite some time.

Inflation is Very Bad Right Now But It Is Going According To The Script

What is happening is that the inflation is going according to the script that was planned and calculated by the specialists so there is no need for any major shock to be found among the people. You can not be shocked by what you have been expecting in the first place.

Inflation Is Very Bad Right Now But It Is Going According To The Script

The personal consumption expenditures core index – excluding food and energy costs –rose 3.4 percent on a year-over basis, in line with Wall Street expectations but also the fastest increase since April 1992.

“It was right down the strike zone,” Mark Zandi, chief economist at Moody’s Analytics, said of Friday’s Commerce Department release. The PCE level is “consistent with the idea that the surge in inflation will be transitory, that it’s related to the reopening of the economy and some of the disruptions that are resulting from that quick reopening.”

The notion of inflation might fade in the near future and that is the only cold comfort that we can have right now. Meanwhile, the price of everything is on a rise right now. So buckle up and we will be facing this war together too.

The Positive and Negative Inflation

Households are worse off because they have less purchasing power when their current-money nominal income does not grow at the same rate as prices. To rephrase, they have less disposable income or actual (after-inflation) income. The standard of living can be estimated from one’s real income. Increases in real incomes tend to be accompanied with increases in living standards, and vice versa.

In actuality, price changes occur at a variety of intervals. Commodity prices fluctuate daily, while salary rates that are set by contract tend to remain stable (or “sticky”) for longer periods of time. The greatest cost of inflation is the erosion of real income that occurs as a result of rising prices that affect different groups of people in different ways.

Final Words

The news updates from the government had been really helpful in keeping track of the situation. Some people have started to panic but we will see which way this goes soon enough.