Skyrocket

The pandemic rocked the world economy, and governments have pumped trillions of dollars into markets, affecting prices and currency for years to come.

Skyrocket

Inflation will trap you one way or another, no matter where you are or how the market advances. Inflation occurs when the money supply expands too quickly, which leads to too many dollars in the system. That then finally leads to a decrease in a dollar’s value. 

With the gradual yearly increase of inflation in the United States, reported by Forbes Magazine, prices have risen by 4% in the past 12 months. The pandemic affected more families than anyone would have ever thought. 

Since inflation rates rose significantly due to the pandemic, families that had not felt affected by this previously were suddenly hit by the burdens of inflation. 

The increase of prices in America creates a ripple effect that touches everyone, especially during these perilous times. 

Ever since COVID-19 hit America by storm, many states have faced an overall shortage of goods due to the severe shipping delays. 

According to the University of Rochester, consumer demand is outpacing the number of available goods and services due to the nearing end of the pandemic. 

Hence, the overall repercussions of unemployment, car prices, and everyday commodities will increase significantly. 

Gas prices have risen 2.8% from July, and the cost of food rose by 0.4%, causing beef to increase by 1.7%. 

The Federal Reserve, whose primary focus is keeping prices constant, foresee prices continuing to rise in the near future as the economy adjusts back to normal. 

The Federal Reserve flooded the economy with money to avoid a more consequential recession, therefore, the market has fluctuated. 

From January 2020, the measure of the money supply was near $15.41 trillion, while in April, just 16 months later, the supply increased to $20 trillion. 

While temporarily keeping the economy afloat from a more dangerous recession, The Federal Reserve also supplied more significant inflation. 

When the money supply expands too quickly, there are way too many dollars in the network, which leads to a decrease in a dollar’s value. 

Ever since the pandemic, companies have tried to maintain their production levels. However, because an increasing number of employees had to call in sick with COVID19, it has become harder and harder to generate typical quantities. 

Once U.S. production started to slow, the federal government stopped most production, which led to a temporary shutdown of the economy. 

After that shift, many employees were driven to unemployment, causing distress for the manufacturers. 

Year to year inches don’t change, and an inch is an inch every year, but the dollar shrinks a little every year,” said AP Econ instructor Paul Chiment. 

During the pandemic, many families struggled with the effects of unemployment caused by inflation. 

From housing prices to market values, inflation will increase people’s cost of living over time. 

As the world slowly makes its way out of the pandemic, the inflation rate is not decreasing.

Chiment suspects that we have been pent up for over a year, and people feel the need to buy goods that have not been able to for the duration of the pandemic. 

“You are seeing a lot of people wanting goods and services, which jacks up prices,” Chiment said. “At the same time you’re seeing suppliers have supply chain issues.”

“They are having a hard time getting the materials they need to make the goods, and there’s a lot of people wanting things with few people producing them causes inflation.” 

Due to inflation playing a critical factor in prices, many are choosing to start thinking about this to understand how it affects them. 

Inflation finds a way to touch every corner of the economy. Whether you are affected by it directly or feel as though it has never touched you, it is important to have an understanding of what causes it and how you can protect yourself. 

Daisy Altamirano, a local seventh grade teacher said, “It would be very beneficial to them [her students] to learn about the world around them. One of my big goals as a teacher is to give my students real applications.”