{"id":28156,"date":"2022-01-03T02:37:32","date_gmt":"2022-01-03T02:37:32","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=28156"},"modified":"2022-01-09T12:44:46","modified_gmt":"2022-01-09T12:44:46","slug":"nflation-workforce-participation-and-real-wages-3-key-indicators-for-monitoring-the-economy-in-2022","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/nflation-workforce-participation-and-real-wages-3-key-indicators-for-monitoring-the-economy-in-2022\/","title":{"rendered":"Inflation, workforce participation and real wages: 3 key indicators for monitoring the economy in\u00a02022"},"content":{"rendered":"\n

Veronika Dolar<\/a>, SUNY Old Westbury<\/a><\/em>; Marlon Williams<\/a>, University of Dayton<\/a><\/em>, and Melanie G. Long<\/a>, The College of Wooster<\/a><\/em><\/span><\/p>\n

The U.S. economy ended 2021 with a lot of uncertainty. Inflation surged<\/a> to levels not seen since the 1980s \u2013 seriously eroding consumer purchasing power \u2013 while the highly contagious omicron variant forced many Americans to hunker down<\/a> as case counts soared to record levels<\/a>, reducing economic activity.<\/em> <\/p>\n

How will the economy fare in 2022? And given its size and complexity, how will we even know whether things are improving? To offer some clues, The Conversation U.S. recruited three economists to highlight one measurement tool they\u2019ll be following closely in the new year and explain why it will help them \u2013 and you \u2013 better understand how the economy is doing.<\/em> <\/p>\n<\/p>\n

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Will inflation keep rising?<\/h2>\n

Veronika Dolar, Professor of Economics, SUNY Old Westbury<\/strong><\/p>\n

Americans, especially those on low incomes, have felt the pinch of higher prices in recent months. The price people pay for everything from fish to gasoline has soared<\/a>, with the pace of change the highest it\u2019s been in decades. <\/p>\n

Inflation<\/a> is a sustained, generalized increase in the prices of many goods and services in an economy. Inflation erodes consumers\u2019 purchasing power and the value of their cash, in effect reducing their real incomes.<\/p>\n

A modern economy has millions of goods and services whose prices are continually quivering in the breezes of supply and demand. How can all of these shifts be boiled down to a single inflation rate? <\/p>\n

As with many problems in economic measurement, the conceptual answer is reasonably straightforward: Prices of a variety of goods and services are combined into a single price level or index, and the inflation rate is simply a measure of its change over some period.<\/p>\n

Economists have many ways to measure inflation, from the ubiquitous consumer price index<\/a> to the little-known gross domestic product deflator<\/a>. Even the satirical publication The Onion has a guide<\/a>. Each has its strengths and weaknesses. <\/p>\n

I prefer<\/a> the tool that journalists commonly use and you\u2019ve almost certainly seen in recent weeks trumpeting the highest inflation rate in about 40 years<\/a>: headline CPI<\/a>, which rose 6.8% in November 2021<\/a> compared with a year earlier. This is the broadest version of the consumer price index.<\/p>\n