You’ve noticed it—at the gas station, the supermarket, any retail giant. Prices are skyrocketing.
Rebounding from the microscopic enemy that singlehandedly petrified and stalled the global economy, post-pandemic America is in the middle of “the biggest 12-month inflation spike since 2008” and “the sharpest 12-month jump in core inflation since 1992,” reported The Associated Press. Core inflation measures the uptick in the cost of goods and services without taking into consideration those of food and energy, the pricing of which is regularly unstable, or “volatile.”
Even the Personal Consumption Expenditures Price Index, “the [Federal Reserve’s] preferred inflation barometer” and the more conservative of the several indices used to measure inflation, “is unusually high,” having reached “a 13-year high of 3.6%” in April.
Translation: Life got a whole lot more expensive—real fast.
Beef, milk, Skippy peanut butter, and even fruits and vegetables went up in price in the month of May alone. According to New York Post, one pound of oranges is now 12 cents more than the same time last year. “Prices for corn, grain and soybeans are at their highest levels since 2012,” the AP cited. Bacon got hiked up substantially, “with prices up 1.7 percent compared to the month prior and up a whopping 13 percent compared with a year ago.” And both General Mills and Coca-Cola are planning to increase some product pricing.
But it’s not just food; it’s services too. Used and new automobiles, lumber, gasoline, airfare, restaurants, hotels, diapers, and—dare we say—toilet paper have all shot up. Take, for instance, airfare, which went up 10.2 percent in April and another 7 percent in May.
Healthy Economy or Financial Disaster?
The inflation is being caused by a chain reaction: A labor shortage, from “supplemental unemployment benefits [from the pandemic, which] have served as an incentive for workers to stay home,” has led to “supply chain bottlenecks,” which in turn have led corporations to increase prices “to make up for higher wages they’re now paying to keep or attract workers.” Recently, “for example, Chipotle Mexican Grill announced it was boosting menu prices by roughly 4% to cover the cost of raising its workers’ wages.”
And no surprise—people are divided over it. Some think it a positive, natural consequence to getting out of an economic recession. In general, these experts, which include officials at the Fed, believe moderate and gradual inflation to be the “optimal” modus operandi. They chalk up this “higher inflation … [as] a temporary consequence of the economy’s rapid reopening, with its accelerating consumer demand. … Eventually, they say, supply will rise to match demand.” They’re furthermore brushing off others’ worries as a mirage compounded by “a ‘base effects’ skew caused by the drop in prices that occurred at the beginning of the coronavirus pandemic.” In other words, from their perspective, the current inflation appears more drastic than it actually is. And investors, for one, are following suit, “so far [appearing] unfazed by the risks of higher inflation.”
Meanwhile, on the other side of the aisle are those who believe this could be the beginning of a “wage-price spiral,” a cycle that causes repeated increases in employee wages and consumer costs, eventually resulting in an economic crash. They cite such dire cases as the spiral in the 1970s, spurred by the 1973 oil embargo against the United States and ending in a dreadful recession. They fear the current inflation as “a risk to the economy’s recovery from the pandemic recession.” For instance, what if, to account for the rapid inflation, the Fed, as the nation’s bank, “[raises] interest rates too aggressively”? It could start a chain of events in the opposite direction, causing the burgeoning demand to shrink and the economy to subsequently shut down once more.
But no matter how the cookie crumbles, everyone seems to agree on one thing: The American people are having to “pay up.”
Take It to the Bank
This is the consumer society that we live in: buy, sell, must have! The law of supply and demand makes our world go around. It’s a cause-and-effect that sustains our very real needs. We need to eat. We need money to buy the food to eat. We need to work to get the money to buy the food to eat.
And the regular American simply gets swept up in these tidal waves of economic instability. In times like these, it’s easy to get stuck in the daily grind and run that rat race like your life depended on it. Life becomes a dollar sign.
But it is exactly in times like these when we, above all else, must set our sights on our heavenly Father who “freely [gives] us all things” (Romans 8:32). So many of us “[heap] up treasure” (James 5:3), “riches … corrupted, … garments … moth-eaten” (v. 2).
How vastly different it is with our God, who has made us His “special treasure” (Deuteronomy 14:2), who sent His only Son that we may “buy wine and milk without money and without price” (Isaiah 55:1). This is “the gift of God” (Ephesians 2:8)—salvation by grace through faith in Jesus Christ alone!
You may learn more about this priceless gift through our online presentation “Inflation and Free Gifts.”
Therefore, as Jesus said, “do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven” (Matthew 6:19, 20). Rather, claim this Bible promise: “My God shall supply all your need according to His riches in glory by Christ Jesus” (Philippians 4:19). It is the only treasure that will ever satiate your needs—and you can take that to the bank.