Study shows that inflation and supply chain issues are to blame
New data reported by Statista.com on October 20 has shown that many things the average American relies upon are going up in price - drastically. This is largely thanks to inflation and the lasting effects of COVID-19 upon the economy.
This has compounded the levels of inflation in post-pandemic America which are higher than were expected and which exceed that in industrialised nations around the world. What this means in real terms is that many goods and services that Americans rely upon and consume regularly, are costing significantly more than they used to:
Why is this happening?
In the simplest of terms, things that used to be plentiful in supply and which therefore cost less in a pre-pandemic world, are now more scarce. This means that the cost of what remains has gone up.
Global supply chains are struggling to recover as demand for goods continues to outstrip supply. Initially it was commodities like lumber and corn that were in short supply. Now, more basic goods are being impacted.
More recently, a shortage of truck drivers is preventing goods from being distributed around the country. Meanwhile, fleets of tankers are anchored offshore of the Port of Los Angeles as capacity within the port to receive and unload the ships is failing to keep up.
Each of these factors is impacting upon how readily Americans can get hold of the things they want, and pushing up the price of what's available.
The cost of stimulus checks
Inflation is the final important factor. The economy is in recovery after pandemic shutdowns forced governments to issue stimulus checks to individuals and businesses to prevent them from going broke. The money to back these payments couldn't just be made from thin air, so the federal government authorised mass printing of money to boost the economy - a process called quantitative easing.
The effect of the increased supply of money at source is to ultimately reduce the value of the money that was already circulating in the economy. The result is that those wanting to sell goods or services - be that eggs, steaks or apples can demand more money from people in exchange. That's why prices are going up for things that Americans take for granted.
There is no immediate end in sight for these price increases - if and when supply chains recover to some sort of normality we can hopefully expect to see prices coming down in some commodities.
But for some items it could take a lot longer. Rental accommodation and lodgings for those looking to vacation within the states may remain in higher demand for many years as more people choose to vacation within the US, either because the ongoing pandemic prevents overseas travel or because they cannot afford to travel further afield.
Either way, the costs of a bed and breakfast in the US could remain high for years to come!