Did We Overstimulate The Economy? Maybe
As the US economy continues its recovery from COVID-19, retail sales have jumped to 15% above pre-recession levels. But that consumption comes at a cost, stirring inflation for gas, food, and building materials. And amid those rising fears and the reality of considerable labor shortages and wage inflation, one question persists: could we have overstimulated the economy?
“Maybe we did,” says John Chang, senior vice president and director of research services at Marcus & Millichap. “But that’s probably a lot better than understimulating it and waiting years for a recovery.”
But, there’s a caveat, according to Chang: “the Fed, Congress, and the President will probably have to ease off the throttle a little bit so the situation doesn’t spiral out of control,” he says.