How different is the current economic environment compared to pre-pandemic period?steemCreated with Sketch.

in hive-172186 •  3 years ago 

The US consumer price Index (CPI) as of October 2021 was 6.2% above a year ago.
For the 27 years from 1994 through 2020 the CPI inflation rate was 2.2% with a volatility of only 1.2%. If we take the previous 27 years as the pre-pandemic period and we heroically assume that the probability distribution was a normal, bell-shaped curve, then the probability of a 6.2% inflation rate was less than 0.02%.
Statistically at least we are definitely in a different inflation environment with labor markets, there are 10 million job openings, compared to an average of under 5 million for the whole 2001-2019 period. Statistically this is a 4+ standard deviation event, way outside pre-pandemic range.
This time around things seems different because they are. The biggest risk is any ine takes is to act as if nothing changed.

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