The world economy is out of whack and governments are not sure what to do.
The evidence is in a daily barrage of headlines suitable for alarming pronouncements.
The prices are rising. Inflation doesn’t seem to be going anywhere.
On Wednesday, the government’s consumer price index confirmed what anyone who’s been to the supermarket already knew: US prices have risen.
“Rising prices for food and housing contributed more than half of this increase, while prices for new cars, household items and auto insurance also rose,” writes CNN’s Anneken T -pe, adding that new car prices have seen their largest increase since 1980. The price of gas has risen by more than 40% in one year.
The roughly 70 million U.S. Social Security beneficiaries will receive their largest cost of living adjustment since 1982, the government announced on Wednesday – an increase of $ 92 per month to an estimated average of $ 1,657 next year to reflect rising costs cover.
Not everything is more expensive. Air tickets have decreased a bit.
But daily costs such as rents are increasing. Home prices are expected to continue to rise, according to Goldman Sachs. The investment bank predicts that more and more people will be pushed out of the home market by high prices, only to be put under pressure by high rents.
RELATED: Social Security Recipients Get a 5.9% Increase, But Soaring Prices Will Compensate for the BoomWhat is the solution to high home prices? Maybe relaxed zoning laws. Goldman Sachs noted that California has removed single-family home zoning in the state, which could add residential units. Read more about CNN’s Anna Bahney Living.
Workers quit their jobs
A record number of Americans – 4.3 million workers, or nearly 3% of the total workforce – quit their jobs in August. That’s the highest churn rate in the history of the government survey, which tracks the data, which has existed since 2000.
CNN’s Matt Egan writes that workers want higher wages, better conditions and more flexibility. And companies are so desperate for labor that people don’t worry about what else is available.
This isn’t the cheesy hyperdrama of disaffected hard workers giving up and moving away that Ayn Rand wrote about in “Atlas Shrugged”.
It is a problem for companies struggling with a labor shortage.
But it is also a potential “golden age” for American workers, writes Egan. He spoke to Joe Brusuelas, chief economist at consulting firm RSM, who said we are in the middle of a pivotal moment as the US and the rest of the world overcome Covid-19.
“That h -pens after a major war or depression,” said Brusuelas. “It’s hard to tell while you’re at it, but we experienced a shock that caused an unexpected change in the population. And it will take time to clear that up.”
“People make different decisions, they have moved to different places,” said Jamie Dimon, CEO of JPMorgan Chase, on Wednesday. “Covid has influenced the way they think. There is more churn. That’s fine and will normalize over time, ”said Dimon.
RELATED: Low Wage Workers Received Staggering Pay RaisesBut not all are worker empowerment stories. And it’s not just American workers who matter to the US economy. Read this report on an open letter from groups in the transportation industry calling for more freedom of movement for transportation workers around the world and access to Covid-19 vaccines to prevent the transportation industry from coll -sing.
We saw all of the photos of container ships in lines. The story describes seafarers on cargo ships who have not been allowed to go ashore for 18 months. It also describes how a truck driver shortage in Europe has been made more difficult by mandatory Covid-19 tests in some countries there.
The supply chain is not free from congestion
In an effort to evacuate the container ships that are overcrowded off the US shores, President Joe Biden announced on Wednesday that certain US ports would operate around the clock to alleviate supply chain problems. That will not solve the c -acity problems in US ports and on inland transport routes. Meanwhile, the Bill to Increase Infrastructure Spending on C -itol Hill can’t quite cross the finish line. Read more about Biden’s plan to move the supply chain into the country.
Many of the foregoing elements – labor shortages and inflation – are also tied to the supply chain.
The International Monetary Fund lowered its growth forecast for the US on Tuesday, citing the supply chain. Egan writes on a Moody’s report suggesting the supply chain will hold back the economic recovery. Other analysts aren’t as concerned and believe that companies will adjust and that the supply chain will eventually work again.
The energy crisis is real
Energy problems are more concentrated in Europe, where the price of natural gas is skyrocketing, and in China, where coal is becoming increasingly expensive. There is a spillover with US gas prices at a seven-year high.
A surge in fossil fuel prices should be just the thing to convince more people that now is the time to move to the greener and renewable energy sources needed to fight climate change – but the Democrats’ proposals, right doing that is becoming less and less likely in Washington. The real impact of higher fossil fuel prices could weigh on people and businesses, and inflation even higher. Read more about why there is no quick fix to the global energy crisis here.
Bottom line: “I think it’s about how all of this shows how big the shock is that Covid has brought to the whole planet,” Egan said. “Entire systems that we all took for granted, like a supply chain that works behind the scenes to get goods from the factories to your doorstep, have coll -sed. Our assumption that there are always enough workers to drive trucks and work in ports ”have gotten into disarray. And while the pandemic h -pened quickly, there is no reason to believe that these problems will go away overnight. It will take time to sort them all out. “
In-depth: Which employees quit and why?
Which employees are giving notice exactly?
I asked CNN’s Tami Luhby what we know about who is quitting and why. This is what she said:
More than half of that increase came from the hotel and restaurant sector, where 157,000 people left the country … These jobs tend to be lower, so some workers are attracted by the signing rewards, wage increases, and other incentives companies offer offer to fill their openings.
26,000 people in the wholesale sector, including truck drivers and sales representatives, also quit their jobs, as did 25,000 people in the municipal education sector.
The number of layoffs increased in the South and Midwest.
But in some sectors the number and rate of people dropping out has decreased. For example, fewer employees in the real estate / rental / leasing sector said goodbye to their jobs. The number of layoffs fell by 23,000.
Is it because of the unemployment benefit? And can one argue, as many Republican governors and businessmen have done before, that the now expired extended unemployment benefits are responsible for the labor shortage?
Lubby: It is becoming increasingly clear that the end of the pandemic unemployment benefit is not causing the unemployed to return to work. The workforce contracted last month for the first time since May, suggesting that more people are choosing to sit on the sidelines and not actively look for jobs.
In addition, employment did not grow much faster in the two dozen states (all but one named by Republicans) that opted to quit in June or July, previous studies and government data showed.
Improved unemployment benefits may have had a small negative impact on people’s interest in finding work, but other factors – including childcare problems, virus fears, and workers reassessing their goals in life – played an important role.
However, experts caution against drawing firm conclusions from data from just a month or two.
Unemployed people usually have to -ply for jobs regularly in order to be eligible for unemployment benefits, so termination of benefits may cause some to stop looking, at least temporarily. And others may be looking for a new job, but it takes time to find the right partner.