05/25/2026
Over the last 2–3 years, many Americans have asked the same question:
“How did the cost of living rise so dramatically so fast?”
Groceries, insurance, housing, restaurants, construction materials, utilities, vehicles, labor, and everyday services have all surged in price. In some industries, costs have nearly doubled.
The answer is not just one thing. It was a perfect storm of economic forces happening all at once.
Here’s the simplified reality:
During the pandemic, trillions of dollars were injected into the economy through stimulus programs, PPP funding, unemployment expansion, grants, low interest rates, and aggressive money supply expansion. While many programs helped people and businesses survive, the overall volume of money introduced into the economy was enormous.
At the same time:
• Global supply chains broke down
• Manufacturing slowed
• Shipping bottlenecks developed
• Labor shortages increased
• Fuel and transportation costs surged
• Housing inventory remained critically low
• Interest rates stayed artificially low for too long
The result?
More money was chasing fewer goods and services.
That naturally drives prices upward.
Then businesses faced:
• Higher wages
• Higher insurance costs
• Higher material costs
• Higher fuel expenses
• Higher borrowing costs
• Higher operating risks
Those increases were passed directly to consumers.
In some cases, companies also discovered consumers had become conditioned to higher prices and permanently repriced products and services upward.
One important thing people misunderstand:
Even when inflation “slows,” prices usually do NOT go back down. They simply rise at a slower pace.
That’s why many Americans still feel squeezed financially even when headlines say inflation is improving.
The pandemic did not create every economic weakness we are seeing today. It exposed and accelerated problems that already existed:
• Excessive debt dependence
• Fragile supply chains
• Housing shortages
• Labor imbalances
• Over-reliance on cheap money
• Government overspending
• Inflationary monetary policies
COVID compressed what may have been 10–15 years of economic repricing into just a few years.
Understanding economics matters because informed people make better financial decisions.
At Clyce Advisory Group, we believe education and strategic thinking are critical in helping individuals and businesses navigate uncertain economic environments.
— Jay Clyce
Clyce Advisory Group, LLC
“Strategically Growing Businesses”
