3 charts show rising prices won’t be a huge problem for the economy, according to Goldman Sachs

economy charts prices goldman sachs
Middle East
  • Date: 01-Jul-2021
  • Source: Business Insider
  • Sector: Economy
  • Country: Middle East
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3 charts show rising prices won’t be a huge problem for the economy, according to Goldman Sachs

The specter of inflation might not be as scary as many anticipated. Gauges of nationwide price growth show inflation hitting as the economy reopens and businesses struggle with supply shortages. Yet underlying dynamics aren't so clear-cut, economists at Goldman Sachs said in a Wednesday note. For one, much of the overshoot seen in recent months is linked to production bottlenecks. Used car prices, for example, have surged more than any other category as the global semiconductor shortage curbs vehicle manufacturing. The unusual nature of the pandemic economy also makes measuring inflation more difficult. With the country still reopening, spending is quickly shifting from goods to services. It's likely that, after accounting for some pandemic-related trends, inflation is weaker than headline gauges suggest, economists led by Jan Hatzius said. Here are three charts revealing how inflation is a smaller danger than experts feared.

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