Pandemic-Induced Recession: Will It End?

By Kate Marino 

JRN 100 Staff Writer

 Research shows that many people will continue to struggle financially because of the pandemic and in the face of inflation.

“In the U.S. and around the world, inflation is high and getting higher”, a Pew Research Center analysis discovered in 2022, from 44 advanced economies finds that, in nearly all of them, consumer prices have risen substantially since pre-pandemic times, said Drew Deliver. 

“People treat inflation as one problem,” said Texas Christian University Economic Professor and Inflation Expert John Harvey.

Many people are not even aware of what inflation is or what it does. Here is a general simple definition of inflation to educate everyone to be more understanding of a global issue. 

“Inflation is known to be a general increase in prices, and a fall in the purchasing value of money,” said Harvey.

 

It is always caused by money supply growth. There are many different causes. A big cause was COVID-19. Covid created used cars to double the prices they were before. As well as computers. Then necessities went through an uproar in prices like groceries and other goods and services. 

“Because of COVID, we are still having trouble getting stuff from China, goods and services wise. We have had tons of interrupted supplies that make the prices increase,” said Harvey. 

Harvey said it would be more practicable for people to understand how to live with inflation rather than suffer by trying to get rid of it. The things that happen around the world effect inflation. 

“Nearly two-thirds (64%) now say their incomes are not keeping up with the rising cost of living, which also is up substantially from February (58%). The number saying it is difficult to afford food has followed a similar upward path; 38% say that now, compared with 27% five months ago,” said the Pew Research Center. 

Harvey adds that many are dealing with the after-pandemic recession and now the war between Russia and Ukraine. The battle between the two has caused gas prices to rise and it has hurt the lower income of the United States rather than the higher income.

The lower income citizens that live in houses or affordable housing are suffering. They may not have well-insulated homes, which means they face higher heating costs. Because the gas prices have risen, they are hurt during this because they are still trying to balance and recuperate since the end of COVID-19. 

Annamarie Vitale is a mom of four, including owning two dogs.  She was very stressed during the pandemic because she had to cut back on daily expenses and things her family necessarily didn’t need but wanted. 

“It was very frustrating not being able to get my favorite things or what my kids needed in the supermarket. Water was scarce, and it began to be a problem that scared me. It also was very frustrating because, when they were back in stock they were very limited, and they cost way more than they would normally” said Vitale. 

“Groceries, or “food at home,” makes up a bit more than half of that category. Grocery prices were 6.5% higher than a year ago, which will come as no surprise to anyone who’s been to a supermarket lately,” said the Pew Research study. 

Groceries are an essential for everyone. Lower income citizens found it extremely hard to get groceries when most shelves were empty. Especially because everyone was in lockdown and we get most of our food from Ukraine. 

“Watching and hearing that the nearby food pantries and people who were lower class had even less than normal than usual. It was very upsetting for me,” said Vitale. 

It was a tough time for everyone and everyone was impacted differently. People are still suffering now. Harvey described that people need to understand what inflation is. Inflation is never going away. People treat it as a broad category. But they fail to realize it stands individually. 

“Explanations for the current phenomenon proffered to date include continuing disruptions in global supply chains amid the coronavirus pandemic; turmoil in the labor markets; the fact that today’s prices are being measured against prices during last year’s COVID-19-induced shutdowns; and strong consumer demand after local economies were reopened,” said Pew Research Center. 

Many studies show that the United States is struggling the worst with covid-19 inflation recovery and unemployment failure. 

Inflation can go away. Prices can turn back if the original reason is gone. Harvey reminds us that years ago we have had pandemics and oil crises. We have figured out a solution then. For example, discovering more oil in the Ukraine or learning how to process the oil by using way less.  

Harvey leaves everyone with the biggest advice he feels he can give. To truly understand inflation and mathematically not treat inflation as one number you need to break it down. 

As the world moves on and COVID-19 comes to a heavy halt, things are starting to open up again. Everyone has a whole need to understand we all have an impact on changing the inflation narrative. It hits us all hard the difference is how hard can we fight back. 

Future statistics and studies show, inflation to come to a steady rate. Experts predict that in 2023 inflation should be under control.  

“Economics from the Federal Reserve expect more core inflation to fall to 3.1% next year,” said Sarah Hansen. 

Preston Caldwell predicts that, 

“Pressures affecting those industries (the semiconductor shortage, for instance along with supply chain snags and disruptions caused by the war in Ukraine) to ease up. Between that normalization and higher interest rates, Caldwell says inflation is on its way back to normal levels.”

On a long-term level, economists are already predicting how it will turn out. Their predictions are all over the place, as the future sits in the unknown. 

“US expected change in inflation rates: Next 5 years is at 3.00%. This is lower than the long-term average of 3.20%,” report done by the University of Michigan Surveys of Consumers.