Key Points
- As shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones.
- Yet some industry watchers predict deflation for food at home later this year.
- Falling prices could bring new challenges for retailers, such as pressure to drive more volume or look for ways to cover fixed costs, such as higher employee wages.
You’re getting supply and demand confused with inflation.
Inflation is a rise in the general price of goods. One item changing price (like a Taylor swift concert ticket) isn’t inflation, especially peak pricing.
Explaining it is much more than a commet length, but ill try before my phone dies.
As gdp increase (better efficiency, more good sold, new markets, value add services) more people are employed to do this work. Unemployment falls when this exceeds the growth of a population from either new people entering the workforce or immigration and against retirement and death. Okuns law.
As Unemployment falls, inflation increases. Less people employers are fighting over means perks and wages increase, driving inflation and costs of production. Phillips curve relationship.
Effectively, economic growth results in inflation.
If I had more time, changing the OCR affects components of GDP, changing inflation through these methods. But there is alot that goes into the logic.