OMG Why are Prices so High?

  1. Increase in money supply: The health crisis closed down companies, bringing unemployment rates up. The government reacted by giving economic support via “Covid checks.” The Fed dropped interest rates to further stimulate the economy.
  2. Energetics: OPEC agreed to reduce oil and gas sales, hiking prices around 30%. Besides that cartel decision, small energy producers were casualties of the crisis and to recover that production takes time.
  3. Supply chain delays: Energy issues led to high transportation costs and ships stuck in ports hinder the supply chain and, therefore, the production of goods.
  4. Supply reduction: People have more money to spend, but companies have not caught up their demand.
Source: The Bureau of Labor Statistics

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Alejandro Cuauhtemoc

Alejandro Cuauhtemoc

131 Followers

Let’s talk about gossip in the business strategy & technology worlds. I am Strategy Lead at DiDi in the Bay Area xoxo