Over the past decade, consumer prices in the United States have risen across the market at an average rate of 5.3%, with much of this increased inflation coming in 2021 on the heels of COVID-19 pandemic and all of the market disruption that it has caused. The annual inflation rate for the United States is 8.3% for the 12 months ended April 2022 after rising 8.5% previously, according to U.S. Labor Department data published May 11. The next inflation update is scheduled for release on June 10 at 8:30 a.m. ET. According to Financial Professional, Roy Y. Gagaza, this rapidly increasing rate of inflation presents a lot of cause for concern.
When discussing inflation, Roy Y. Gagaza points out that it's
important to keep in mind that inflation is an inevitable process. It's a
process that has been ongoing ever since the United States abandoned the gold
standard in 1971. While inflation may be inevitable, though, Roy Y. Gagaza says
that inflation that increases too rapidly is what keeps economists up at night.
When the price of goods increases faster than wage growth can keep up,
it leads to significant problems. According to Roy Y. Gagaza, this is an issue
that the United States has been dealing with for quite some time but one that
has become all the more concerning over the past year.
Whether this recent rise in inflation is an indication of a more
long-term problem or simply a blip on the radar is really anyone's guess. The
various supply chain and staffing shortages created by the COVID-19 pandemic
that have given rise to recent inflation spikes could end up being short-term
issues. Still, rising inflation was a problem long before the pandemic struck
and is more of a problem now than ever before.
While Roy Y. Gagaza isn't quite ready to
sound the alarm of pending economic doom, addressing the issues that are
currently fueling inflation growth remains a paramount priority for global
leaders. At a time when so many individuals are still recovering from the lost
wages due to nearly two years of lockdowns, social distancing, and overall
economic stagnation, rapidly rising prices have become a real issue. It isn't
yet a complete recipe for economic disaster given the extraordinary efforts
that the US government has taken to keep the economy afloat, but a lot of the
right ingredients are there.
Roy Y. Gagaza believes that the current surge in inflation still has a ways to go before it reaches its peak. However, he remains hopeful that with the right approach, rising inflation can at least be eventually curbed back down to its pre-pandemic levels. Until that happens, though, the burdens of rising inflation are ones that we will all have to bear.
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