By John A. Tures
The United States received good news regarding the economy during the 2022 recession. But how strong is the overall economic situation? How bad is inflation compared to other countries? What is to blame for this? And what might the coming years look like for our businesses?
“Gross domestic product rose 2.6% in the third quarter against an estimate of 2.3%,” wrote CNBC’s Jeff Cox at the end of October. This was reported by the Bureau of Economic Analysis, covering July to September 2022.
In fact, the Federal Reserve’s economic data chart showed that growth from 2021 far exceeded that of 2018 and 2019, while the historic 30% decline in 2020 left America in a big hole. Fortunately, the post-pandemic recovery has made it possible to regain these losses from 2020.
The good news sent Wall Street numbers soaring at that time. The weekly jobless claim rose by 217,000, but remains below the 220,000 estimate. the wall street journal in their edition of August 6 and 7, 2022.
The economy has therefore recovered from the recession; The NBER hasn’t declared the first six months of 2022 a recession, but that’s their usual definition, so I’m using it. And the jobs lost in the economy in 2020 are all back.
That leaves inflation, which at 8.3% is higher than usual.
So what causes inflation? If the Republicans are right, then America should have a much higher inflation rate than other countries. If the Democrats are right, and it has to do with supply chain issues related to the lingering pandemic, then other countries can expect to have higher inflation rates as well. I analyze inflation data to see.
Clearly, America is not like other failed states like Sudan, Venezuela and Lebanon, which have inflation rates of over 200%. But Turkey (in some first world organizations) faces 69.97% and Argentina, one of the main South American economies, suffers from inflation below 58%. Those who flatter Vladimir Putin would do well to know that Russian inflation is 17.8%.
Nearly 20 European countries have double-digit inflation. In fact, the European Union average is 8.1%, just below the US inflation level, and UK inflation is 9% after years of British Conservative Party leadership. Now, some countries are lucky to have lower inflation rates, including Italy (6%), Norway (5.4%), France (4%) and Switzerland (2.5% ). Some smaller countries like Liechtenstein, the Faroe Islands and Malta are also on the list.
What the evidence shows is that no, Joe Biden did not single-handedly drive up inflation in America, or the world for that matter. The US economy is impressive but not strong enough to affect the monetary and fiscal policies of nearly 200 countries. Given how many other first world countries are going through the same thing as the United States, the supply chain explanation is superior to “It’s all Biden’s fault.”
And it’s important to note that lower inflation rates in Japan and Switzerland are what the Federal Reserve is looking for, even though lowering inflation too quickly could lead to another recession. This is an important factor to keep in mind as America determines the next steps to recover from the devastating economic downturn of 2020.