If you have not yet reached forty years of age, you had not until this last month experienced the rate of consumer price increases Americans experienced in April. We have to journey all the way back to 1981 for that. How, with the labor force participation rate so low and so many jobs unfilled, can the prices of everything–including wages–be rising? Stagflation isn’t supposed to happen, especially not with so much supposed slack in the labor market!
Get used to it because things are just getting started. We’ve grown accustomed to ever-increasing debts, deficits, and asset price increases. Those things aren’t so bad.
For a lot of people, in fact, they’re quite good. They’re raising the debt ceiling again, the trade imbalance with China is getting ‘worse’, yada yada yada. Sounds like I can get a house and stuff to put in it with no money down and almost no money coming in. And you’re upset about this?
We’re now entering a period when the price increases will be concentrated in services and in non-durable goods. It’s not just buying a home that will be expensive. Buying a gallon of milk and subscribing to that streaming service are going to get expensive, too.