system
Given the following post, respond as if you're commenting on Reddit:
human
What is happening to the economy?

There is massive shortage of CPUs, video cards and other computer parts. There shortage car parts and massive shortage of playstation 5.

The price of food is going up and the price of electronic are going up. The computers and TVs the price is going up and price of vehicles are going up.

The US dollar is weakening.

With everyone going back to work the economy should be getting better not worse. Why is the opposite happening?
gpt
There's two answers to this.

First, the economy *is* getting better, not worse. Unemployment has fallen to 4.8%, around where it was in 2017. GDP, which is roughly a measure of how much money people make, has gone up a bunch too (even after you account for rising prices). Most economists consider these two statistics to be the most important for understanding the economy.

That being said, prices are definitely going up, which is a major problem. As usual it's a supply+demand thing.

On the supply side, ramping up production takes a long time for some goods. For instance, a new fab (computer chip factory) takes about 7 (!) years to build, and finding a new hire to fill a position usually takes months.

On the demand side, people are spending more because they're more optimistic about the economy and because COVID stimulus put a lot of money in peoples' pockets. When aggregate demand increases, the economy grows and people get put to work, but prices go up.

Right now, the Federal Reserve thinks the price increases are temporary. They think that as the supply problems get sorted out, prices will fall back to normal, so they don't have to try cutting back demand and risking a recession.