In “The Everything is Weird Economy,” The Atlantic staff writer Derek Thompson seeks to shed light on the current economic climate. Basically, the current situation makes no sense.
Relationships between different economic indicators do not match in the usual way. Gas prices are falling, but inflation is still rising. Prices are rising, but wages are falling. GDP and growth indicators typically go up and down in tandem. The difference between the two numbers is now at an all-time high.
There is no economic history that correlates with what is happening now. The last two recessions were caused by real crises that we faced. The 2007-2008 mortgage-backed securities debacle and the recession caused by the coronavirus shutdown of the global economy.
In short, even experts do not understand what is happening now. The media talks about inflation under their breath at every opportunity and does not help. And last week’s employment report made the situation even more confusing.
“We may be in a transitional moment where data doesn’t make sense for a little while,” concludes The Atlantic’s Thompson.
That it’s still about the pandemic seems to be the best guess. Demand for goods has increased dramatically, but demand for services has declined. Gas prices fell, supply he chains crumbled, and cargo began piling up in ports around the world. We can’t untangle it all right away. Most economists struggle to make sense of the current economy, so we should probably do ourselves a favor and stop trying to make sense of it.
Mary Ann Larson
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