From now on, the dollar will cost 1.25 or 1.50 instead of the standard $ 1 for items in wood. The last (think family dollar, dollar general, etc.) Crop Chain had to bow its head last month to actually sell cans of cutlery, stuffed animals, Bibles and sugary soft drinks for $ 1. For the price increase that holds the United States. The costs of delivering their cheap products have skyrocketed and the company has turned to it, CEO Michael Witnsky explained.
The dollar tree is a useful example to illustrate US inflation Tweets by opposition politicians. Prices rose 5.4 percent in September compared to the same month last year. In August and September alone, prices rose 0.4 percent. Americans observe payments at supermarkets and bumps every day: Petrol prices have risen by an average of 45 percent this year.
Economists and analysts are slowly beginning to adjust their forecasts for inflation after the corona epidemic. Initially, the rising costs of imports and transportation and the associated rise in prices in certain sectors were seen as inevitable shocks to restart the economic machine: supply and demand were simply balanced, with inflation being a temporary side effect.
But two weeks ago, central bank chairman Jerome Powell gave a press conference in which he first predicted That’s it Hunger Will last temporarily before prices fall again. Not possible until next year.
Decline in purchasing power
Inflation is bad news for the president and the Democrats, who rule the country with a very small majority. They won the November 2020 election under the goal of ‘Trump has created chaos and we are going to eliminate chaos and reform’. Biden first pledged to tackle two major crises: epidemic and economic. The summer peak of the virus has really pushed Americans backwards. But the economy is worse than forecast.
Increased costs for delivery lead to higher prices, thus reducing purchasing power. The Ministry of Employment said this week Real income has fallen by an average of 0.8 percent over the past year.
In addition, unemployment is a difficult issue. In September, the number of jobs in agriculture increased by 194,000, excluding seasonal labor. The unemployment rate is now 4.8 percent, up from 3.5 percent in February 2020, the month before the last ‘normal’ month when parts of the economy were shut down to fight the corona virus.
Bloomberg News Agency finds “five million missing” unemployed after ten in-depth interviews More and more people no longer want to and will return to their old jobsAlthough there are more vacancies than unemployed. Respondents did not see the point of temporary jobs, which got them too little to pay for fixed costs, they were afraid of new types of corona virus, or they knew they could now demand higher pay than their employers wanted.
By the way, not all numbers are bad. Consumer spending has risen: another reason for inflation. Between the fourth quarter of 2019 and the Labor Department’s latest monthly reports, Americans spent 18 percent more on goods. Thus the price of goods in September was 9 per cent higher than a year earlier. During the same period, the cost of services fell by 3.2 percent.
The combination of high consumer demand, high inflation and low unemployment provides Biden and the federal president Powell with tough choices. Which buttons should they turn?
Biden first selected the distribution lines. He announced this week that Los Angeles Port, Asia’s largest import port for products, will process goods 24 hours a day and that large retail chains like Walmart will align their vast containers on the vast site. Biden hopes to increase supply and thereby reduce prices somewhat.
Unemployment is a different story. Biden campaigned with a plan that included higher pay. Job seekers who no longer accept low wages see Democrats on their side. This is a subtle balance, because the pressure of higher wages is hard to feel among small businesses, and they too have Biden’s sympathy.
Meanwhile, economists also use this proverb Never waste a good crisis Handle In August, at the Federal Reserve Annual Meeting, University of Chicago macroeconomist Veronica Curie presented a study Inflation is a good way to implement the necessary economic reforms. The hard-hit sectors of Govt (services, office real estate) will have to lose weight compared to sectors that thrive in the ‘new nature’.
If people do not want to return to low-paying jobs, those companies will shrink or disappear in favor of higher-paying companies. If people do not want to return to the office, the makers of technology to help them work from home will benefit. Inflation, the career argued, could be a good stimulus. For now, Biden has not opted for such a difficult restructuring.
Version of this article also appeared on 16 October 2021 on NRC Handlesplot
The version of this article also appeared in the NRC on the morning of October 16, 2021
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