Image Courtesy of The Analysis of Hype
By Lauren McGinn
2022 brought the American public uneasiness. The effects of the pandemic on the fiscal year of 2020 and 2021 were crazy. In 2022, things started to recover, but the economy was still feeling the effects of the dormancy of some major markets throughout the beginning of the pandemic. The main problems that the 2022 fiscal year made obvious were serious inflation, inefficiency of supply chains, fluctuating prices on basic goods, and labor shortages.
Inflation only results in pain and hardship for the American people, and they get less than they deserve when our economy is inflated. The US Inflation Calculator reports that the rate of inflation at the end of the 2022 fiscal period was a whopping 8.2%. The Federal Reserve is supposed to intervene if this percentage rises over 2.
Currently, there is a lot going on in the world that can be attributed to inflation. The effects of these global events are more than negligible, the reality of our current situation is inflation is a policy choice. The fact that inflation is at 8.2% can cause one to believe that policymakers are not working for the American people. Coming out of an inflation by cooling off the economy can be painful and even devastating, but no more devastating than inflation itself.
Supply chains have been a problem since the beginning of the pandemic because of several factors such as the halt in production during the initial weeks of the pandemic (In the 2020 fiscal year), followed by an increased demand in specific goods and services throughout 2021 and 2022. This rise in demand was met with difficulty or inability to transport due to a lack of workers.
Fluctuating prices through the 2022 fiscal year were among the most complicated phenomena experienced by the American public. Prices can rise for a number of reasons, and it doesn’t always mean that the materials used to produce it are more expensive, it could be due to a sudden demand or a bigger rate of demand than rate of supply, causing scarcity, or inefficiency of supply chains and transport. Price instability is most common in rapidly heating economies. This kind of growth is inevitable after the pandemic, and it needs to grow, but the response needs to be correct so that the American people don’t suffer further from price instability and high prices of basic goods.
The unemployment rate fell from 4.7% to 3.5% from the beginning to the end of the 2022 fiscal year. Today the unemployment rate is 3.7% (the reported pre-pandemic rate from February 2020). For reference, in April of 2020 America saw an unemployment rate of 14.7%. This great recovery of the employment rate seems like it would alleviate labor shortages. The prevalence of extreme labor shortages across markets through the beginning of the pandemic was inevitable, but through 2021 unemployment rates steadily fell, and today they are almost completely recovered. So why are grocery stores, restaurants, and other businesses suffering a shortage of workers? It’s really hard to tell. The numbers seem to say that unemployment is “okay” in a relative sense, and people are working. However, these people are not working in the job markets who are having a labor crisis. This is interesting that a lot of people are rethinking their careers, valuing their services and time differently, and leaving these jobs for other jobs. It has caused a serious problem, but it is curious how the pandemic affected the way people value and view their own labor.