Inflation may have cooled slightly last month, but Plastics News Economics Editor Bill Wood wants to make a couple of things clear: Expect higher prices to be around for a while, but don't fall into panic mode about the potential for recession.
"Nobody has a sufficient understanding of inflation to make any kind of credible forecast about the future," he said after the latest inflation numbers were released May 11. "That 35 percent probability of a recession forecast [being discussed by some groups] is just (euphemistically speaking) comical."
That's not to say recession won't happen, but rather that recession is always a possibility. But no one can say with certainty that it will happen "in the near future."
As long as consumers are willing to keep paying higher prices, the economy is in a "type of feedback loop," he said.
"Our readers should be prepared for a long bout of inflation. There are a number of things they must do, but for many, it will take a lot of hard homework to learn what they need to do to ride this out," he said. "Those who do the work will most likely be the ones that thrive in the future.
"In other words, this is an opportunity to gain a competitive advantage. In this environment, the stress on the industry is increasing. The strong competitors will find a way to gain an edge. The weaker ones will sustain real damage," he said.
Want more insight? Bill's monthly column on larger economic issues and the plastics industry focuses on lessons from building and construction statistics. And on May 24, PN subscribers can tune into Numbers That Matter Live, a livestream about economic issues.