Federal Reserve Chairman Jerome Powell stated that he believes Amazon had a large influence on the low inflation rates in the US. Other factors in the inflation levels were believed to be oil prices, e-commerce, and labor slack. I definitely agree with Powell when it comes to e-commerce playing a large role in keeping inflation down. For online retailers, like Amazon, the e-commerce format allows the company to offer lower prices, thus keeping inflation down. It was also interesting to note that Amazon made up 44% of e-commerce sales in the US last year. This is an astounding statistic, and I would predict this market share will decrease in the near future as more companies enter the e-commerce market. I am still not sure whether the emerging e-commerce will be sustainable when it comes to keeping inflation low. I feel like online prices will have to increase at some point in the future. Do you think there are any other factors that have kept inflation levels in the US low in recent years?
https://www.cnbc.com/2018/03/01/new-fed-chairman-says-amazon-helped-keep-inflation-low.html
2 comments:
The success of e-commerce, such as Amazon, is a very surprising factor in the current low inflation rate. It is not something that I would typically think of in relation to the US economy. Another factor that I believe has contributed to low inflation in the US in recent years is the economic policy of the Obama administration in the aftermath of the Great Recession, which had inflation rates reach a record low. As time goes on and the current Trump administration shifts to radically different economic policies, this may soon end.
I am quiet amazed that one company could have such an impact on the economy as a whole. And, as Amazon has been accounting for almost half of the e-commerce market, I believe they will continue to have the biggest impact of a single entity on US inflation rates. The e-commerce market is still rapidly growing, and Amazon with it, so I believe their impact will be felt for years to come while their prices are low.
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