Photo by Mario Caruso
When I barely knew anything about any thing, I would worry about statistical news especially when it pertained to the country’s economic status. I could not see that this number (or information) alone should not be considered for interpretation until other relative information is available.
Inflation rate as a standalone knowledge is not enough. It needs to be compared with, let us say, salaries:
- Is the inflation rate greater than the rate of salary increase?
- Is the inflation rate lesser than the rate of salary increase? One could not exactly assess that their standard of living has worsened when inflation rates rise if their rate of salary increase is perhaps greater. The same argument could also be applied when both salary & inflation rates decline.
Inflation is omnipresent in a growing economy unless there is bureaucratic mismanagement.
There are also other examples as well that we will portray as a series of questions:
- Will an increase in sales of a product or service always translate for every other season?
- Will this demand increase be enough to serve as an early indicator of the rise of unemployment?
- Will this rise in unemployment also pave the way for higher government spending on unemployment benefits?
- Will this higher government spending also prompt policymakers to increase tax as well?
Not enough information is present for any of us to conclude. We must always be anticipative when it comes to any changes, significance over size, in any part of the economic process.