Prices are high. Wages are stagnant. Demand is up. Interest rates are rising.
Making sense of the economic factors that impact our lives and businesses is never easy, but Bill Wood, founder of Mountaintop Economics & Research Inc., did his best to shed some light on the trends that are emerging in a number of areas.
"How many of you are actively planning right now for an extended period of inflation in the United States?" Wood said. "I am not guaranteeing that is going to happen, but from what I heard today and everything I look at, this is going to be a wrestling match."
One of the factors that is causing the surge in prices is that consumer demand has rose exponentially during and after the COVID-19 pandemic.
"Two years ago, they were worried that demand was going to fall off and the cliff because were all going to crawl into a bunker," Woods said. " … (Now,) they're raising interest rates in an attempt to put the brakes on demand."
Whether or not increased interest rates would help to weigh on inflation is yet to be seen, Wood said. But at some point, given the cyclical nature of the economy, a recession is certain to come along.
"We are going to have another recession. Is it going to be in the next two years? I don't know. I honestly don't know."
What he does know is that when it comes to supply chains, the ground is shifting. With the push for onshoring and shorter supply chains, it's likely the industry will transition away from its just-in-time, lowest-cost mentality.
"For a long time, the bar was set at lowest-cost supplier and just-in-time (supply chains)," Wood said. "Nope. Nope. Nope. The days of just-in-time are over. The days of low-cost supplier are over. You are going to have to compete against a lot of different metrics."