Feeling squeezed by rising prices and a higher cost of living? If you share such a sentiment, you should find plenty company. In fact, we are experiencing a tide of inflations, and the economic challenge is global in scale. Private investors are careful hoping to figure out the best way forward. Professionals and economists are analyzing data trying to predict whether a recession will follow. Going against conventional wisdom, the market dynamics in major countries have made it challenging for professionals to read the economic tea leaves. 

       With the current inflation showing no signs of slowing down, a decline in economic activity seems quite likely. That is, the rising costs of goods and services are negatively affecting consumers’ abilities to buy things. A decrease in consumer spending may shrink the market demand and slow economic growth, which possibly leads to fewer jobs and a decline in employment, signs of recession. However, in reality, a strong labor market, with more jobs created and more workers hired at higher wages, and no decrease in consumer spending have directed economists to make a more positive forecast on recession.

        Indeed, it is hard to interpret the conflicting signals in the ongoing foggy market conditions, a result of several complex factors. The current inflation was driven by a surge in demand of goods as countries gradually emerged from lockdowns. On the other hand, there had been a supply shortage caused by delays and disruptions in supply chain brought by COVID-19 pandemic. An increase in costs was further fueled by rising oil prices resulting from Russians’ invasion of Ukraine. Finally, humankind is confronted with yet another blow, global food insecurity, due to the pandemic, war in Ukraine, and the shocking climate change, which may cause inflation to skyrocket even higher.