Currently in the United States, it is clear that the purchasing power of the dollar is losing value, causing prices of many objects to be higher than ever. For example, by now either you or someone you know has noticed a great increase in daily necessities such as gas prices, groceries and clothing. Although not included in the rate of inflation percentage, gas and food prices have been climbing since earlier this year.

This increase of price has caused an outcry for those who are struggling with money. People are justifiably critical of this financial crisis without knowing the cause for such widespread increases in price.

The current economic crisis is the result of the growing inflation in the United States in recent years. A little boom is necessary for the economy, signally growth in wealth. However, when there is too much raise in price it will ultimately hurt its financials.

Inflation is measured by the Consumer Price Index (CPI). CPI is the percentage change in the price of a set amount of goods and services by a household.

One of the initial factors that led to today’s high expansion was the spread of coronavirus (COVID-19) in March of 2020. During this time, citizens had to stay indoors at all times to ensure safety, occasionally with re-openings and re-closing. As a result, people couldn’t predict what would be in demand and so businesses didn’t always have on hand what they needed which caused some prices to skyrocket and occasionally this would domino into other products as well.

With the inflation already agitated by the effects of the coronavirus, the war between Russia and the Ukraine exacerbated several issues, resulting in a high increase in gas prices as the US and a large number of European countries placed sanctions on Russia for its actions. Russia is a major supplier for 10% of global oil supply, causing a shortage of gas in America.

These gaps in supply, alongside a return to pre-pandemic demand for gas, led to the steep price increase we see now. As noted during the pandemic, a shift in one supply and demand can lead to a shift. Resources such as wheat and other goods also increased in price following the increase in gas prices.The increase was made due to elevated prices in flour, nuts, eggs, and even electricity which has forced bakers to increase their prices.

Clearly the cause of inflation isn’t simple. It’s a web of multiple factors influencing one another. Searching for solutions is not going to be easy as multiple businesses, governments, and even countries will have to spend a lot of time and energy cooperating together to return inflation to a manageable level. If people are able to find a solution to the current issue of increased cost it will ensure better opportunities for many people who worry about budgets and counting pennies.