Why the 2021 Economic Situation is Oddly Disastrous
The COVID-19 pandemic and the government response to it has no doubt wreaked havoc on the economy. But the consequences are relatively unique to this current circumstance compared to past economic woes. According to a memo released by the Bureau of Labor Statistics on October 12th, there are currently, in the United States, 10.4 million jobs that are needing to be filled. All the while, the current unemployment rate was 4.8% in September, a figure similar to the beginning of the recession in 2008-2009. Despite these factors, the number of people quitting their jobs in August was 4.3 million, an increase from the previous month, while the number of total hires made has decreased from the previous month. In short, companies are in need of employees, but less people want to get a job and more people are leaving their jobs. The effect of this has been disastrous for the supply chains our country relies upon.
A statement, released in the white house back in June, admits the problems facing the supply chains that are not likely to see improvement anytime soon. Following the pandemic restrictions there has been pent up demand for goods that could not be purchased during shutdowns, with expensive and complex goods like automobiles being at a peak in sales within the last 15 years. However, businesses are severely struggling to keep up with demand. One major factor is the previously noted labor shortages. Since companies are having difficulty filling the positions they need to be filled, they cannot produce goods at an optimal rate causing many slowdowns in the process. Additionally, because the supply lines are so intricate and complex, there is difficulty determining where exactly problems are occurring considering there are numerous steps along the way to produce just one component for an item like a car.
With inflation holding steady at or above 5% since April, with September coming in at 5.4%, this adds yet another factor to the disastrous state of this economy. The odd combination of factors currently being experienced here in America are a perfect storm of factors that will lead to great distress to come.
