How Today’s Inflation Numbers Are Different From 1982

The Consumer Price Index which measures inflation rose to 7% in December, as compared to a year earlier. The last time inflation was this high was forty years ago in 1982.

Looking at the number is frightening enough. 7% inflation is ridiculous. But when we compare the two periods, stark contrasts come into play.

The biggest difference is the fact that back in 1982, we were on the way down. Inflation had peaked at 14.8% in 1980.

Our current problem is the fact that we’re still on our way up.

And what’s our elected officials’ response? Other than grousing about it, not much.

Let me leave you with this.

According to a survey of more than 900 global CEO’s conducted by the Conference Board, over half expected high inflation rates to continue into at least mid-2023.

On a personal level, I ran into a couple of friends downtown that run one of the larger publicly traded businesses here in Illinois. If I mentioned the name, you would know it. They said they were preparing for an economic recession that they think will hit sometime next year.

Yep. That’s right. I just said the dreaded “R” word. Either way, there are a few things that are certain.

Labor shortages aren’t going to end anytime soon. Unemployment is back down to 3.9%, and they still can’t find anyone to drive the trucks. Supply chain problems aren’t ending soon.

The pandemic isn’t letting up. Omicron still has a way to go, and inflation will probably get worse before it gets better.

Let’s not forget the Amazon effect which is already exerting downward pressure on the commercial real estate markets. Prior to the pandemic, everyone was expecting a major commercial real estate repression which would cause numerous bank failures. All of that was put on hold given the stimulus money that was pumped into the economy the last couple of years.

But don’t kid yourself, my Brothers and Sisters. All of those pressures are still there, simmering.

I don’t like spreading bad news. Anyone who’s ever read me knows that I’m an eternal optimist, but this doesn’t look good.

I’ve been an entrepreneur for 31 years, and taken my businesses through war, famine, death, pestilence, and everything else imaginable. I’ll tell you one thing.

You need to be ready. If this does go down the way it looks like it might, there will be opportunities.

The pandemic taught us many things. One is the fact that good things can happen in bad times if you plan.

Think it through now. Get your plans in place. Be ready.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, PPP Loan Forgiveness, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500

www.AccountingSolutionsLtd.com

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