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Inflation is Bad

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Inflation is an economic term used to describe rising prices and a loss of purchasing power over time.

Written by Geoff Williams for Forbes Advisor

Inflation is an economic term used to describe rising prices of goods and services, and a loss of purchasing power over time. It occurs when consumers spend more on the same amount of goods and services today than they did a year ago, writes Geoff Williams, a contributor for Forbes Advisor. It is typically expressed as the annual change in prices for everyday goods and services such as food, apparel, transportation and toys.

When everybody pays more and gets less for it, it can have some profoundly devastating effects on the economy—and some consumers get hurt more than others.

“In every economic environment, there are winners and losers and inflation is no exception.  However, the longer high inflation persists, the harder it is to find winners,” says Jeanette Garretty, chief economist at Robertson Stephens, a wealth management firm. “Ultimately, high inflation seeps into the nooks and crannies of every balance sheet and income statement.”

There are three primary types of inflation:

  • Demand-pull inflation
  • Cost-push inflation
  • Built-in inflation

Right now, the country is dealing with all three major types of inflation, which is rare, according to Christopher Blake, assistant professor of economics at Oxford College of Emory University.

Demand-Pull Inflation – Demand-pull inflation describes how demand for goods and services can drive up their prices. If something is in short or disrupted supply, you can generally get people to pay more for it.

The U.S. is experiencing demand-pull inflation due to wages rising and Americans having a decent amount of money in their savings accounts, Blake explains, although some consumers are starting to empty those accounts.

“Consumer spending has remained high, despite the rising prices we currently see,” Blake says. “This is commonly referred to as demand-pull inflation, as consumer demand pulls prices higher because firms cannot keep up.”

Cost-Push Inflation – Cost-push inflation often kicks in when demand-pull inflation is going strong. When raw materials costs increase for businesses, the businesses in turn must raise their prices, regardless of demand.

“Increases to the prices that producers face put businesses in a tough spot,” Blake says. “They can either accept higher costs and keep their prices the same, or they can respond by trying to keep their profit margins the same.”

When the price of chicken keeps going up, for example, eventually your favorite restaurant will need to charge more for a chicken sandwich.

Built-in Inflation – As demand-pull inflation and cost-push inflation occur, employees may start asking employers for a raise. If employers don’t keep their wages competitive, they could end up with a labor shortage.

If a business raises workers’ wages or salaries and tries to maintain profit margins by raising prices, that’s built-in inflation.

Now, if you learn about your favorite coffeehouse raising prices due to the climbing cost of coffee beans, you’re a victim of cost-push inflation.

And if you’re going to buy that coffee even though the price is uncomfortably high, you’re engaging in demand-pull inflation.

3 Ways Inflation Hurts Consumers and the Economy

1. Less Purchasing Power

The most obvious impact of inflation is that it hurts your purchasing power. If you can’t buy as many goods and services as you did before inflation, your quality of living will eventually diminish.

Less purchasing power really hurts families that were already experiencing financial hardship. “Think more money spent on groceries and gasoline, and less spent on travel and entertainment,” says Angelo DeCandia, a professor of business at Touro University.

“Inflation hits the lowest-income families harder because items such as gasoline and food make up a much larger portion of their budgets, leaving less for discretionary spending,” says Dan North, senior economist at trade credit insurer Allianz Trade. “So, for example, where they used to have money to go out to dinner, even fast food, or [go to the] the movies once a month, now they won’t at all.”

A 2021 study from the University of Pennsylvania found that lower-income households had to spend about 7% more on goods and services last year compared to 2019 or 2020, while higher-income households had to spend 6% more. Remember, the annual rate of inflation for 2021 was 4.7%.

2. Less Savings

If rising prices for essentials is eating into your budget more than normal, you probably aren’t putting as much money into a savings account. A June 2022 Forbes Advisor-Ipsos survey found that 42% of respondents were saving less money than usual.

“Inflation makes all of our income and savings less valuable,” says Todd Steen, professor of economics at Hope College in Holland, Michigan.

If you’re not able to save as much as you used to, you may be less prepared for financial emergencies, forcing you to rely on costly credit cards or loans to pay unexpected bills.

And even if you have money in savings already, that decreased purchasing power means your emergency fund might not stretch enough to cover a financial crisis during an inflationary period.

If you have $1,000 socked away for a rainy day, you’re certainly better off than not having it. But here’s an example of how inflation can eat at the value of your savings.

Car repair prices went up 9% from June 2021 to June 2022 according to the CPI. If you had a $900 car repair in June 2021, in June 2022, that same car repair would have been $981. Suddenly your $1,000 saved up is a little less valuable.

“Inflation is a difficult problem to get rid of in an economy, because when prices increase, workers want to have higher wages and salaries to keep up,” he says. “This can lead to future price increases, and the cycle continues.”

3. Loss of Goods and Services

Some industries do pretty well during inflationary times, particularly ones in which you can’t hold off your spending indefinitely, like supermarkets, gas stations and funerals—but some businesses are completely devastated.

That’s because when inflation runs rampant, consumers spend their money on products and services that they absolutely need, and hold back on what they don’t.

You’re going to get your car repaired if you need it. You’ll keep spending money on food.

But you might not take your kids to a trampoline park. You might instead opt for a free city playground with the youngsters, instead. Decisions like that are understandable when prices are high but collectively, they can damage segments of the economy.

“That could mean your favorite pizza place closes, or your nail salon drops a service because it’s become too costly,” says Callie Cox, an investment analyst at eToro.

The renown economist Milton Friedman quipped that inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced
only by a more rapid increase in the quantity of money supply than in output of goods and services. Consequently, empirical evidence suggest that, if growth in the money supply is greater than the actual growth in GDP, inflation results.

References:

  1. https://www.forbes.com/advisor/personal-finance/why-is-inflation-bad/
  2. https://www.nytimes.com/article/inflation-definition.html
  3. https://www.forbes.com/advisor/personal-finance/types-of-inflation/
  4. https://www.caixabankresearch.com/en/economics-markets/inflation/inflation-merely-monetary-phenomenon

Focus, Discipline and Patience are Wealth Building Super Powers!

Consumer Price Index Jumped 7.1% in November

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The consumer price index (CPI), a key inflation barometer, jumped by 7.1% in November from a year earlier, the U.S. Bureau of Labor Statistics (BLS) reported. The CPI measures the year-to-year change in prices paid by consumers for housing, food and fuel. The BLS uses the CPI to track price changes for 80,000 goods and services.

In November, inflation moderated from its recent 9.1% peak in June 2022 but still remain higher than any point since the early 1980s. Consumer prices for goods and services have been rising at their fastest rate in four decades.

Although economists expected in November a 7.3% annual increase in inflation, a decline in the annual inflation rate doesn’t mean prices fell for goods and services; it just means prices aren’t rising as quickly.

How to Protect Your Money from Inflation

When inflation is rising at a rate higher than normal, here are steps you can take to protect the purchasing power of your dollars.

  • Trim your expenses. To minimize the impact of inflation, review your spending and identify areas to reduce or eliminate completely. It will free up money to invest so you can be better prepared for the future.
  • Wait to pay off low-interest debt. Paying off debt is usually good, but you may want to hold off on making extra payments if you have low-interest debt. Your debt becomes less expensive due to inflation. The extra money may be better used for other purposes—like paying off higher-interest loans.
  • Invest your money. Inflation causes your savings to be worth less over time. To hedge against inflation, you need to invest your money in the stock market. If the prospect of investing is scary, consider a diversified portfolio of index funds to lower your risk levels.

Inflation has ruined everything from going out to buying holiday presents, but, as recent signs show, it may finally be starting to cool in at least some segments of the economy. For example, gas prices are dropping very quickly.

References:

  1. https://www.forbes.com/advisor/investing/is-inflation-good-or-bad/

Are American Consumers in a Recession?

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Over the past few months, supply-chain headwinds, inflationary pressures, inverted U.S. Treasury bond yield curve, and rising interest rates has added friction to the U.S. economy and to business operations across industries.

Consequently, investors have become extremely pessimistic about the economic outlook and stock market sentiment, which both are expected to witness a downturn in 2023 amid the impending prospects of a recession.

Per JPMorgan Chase, rising interest rates, record decades high inflation, geopolitical pressure and other factors could lead to a recession that will likely wash away the benefits of savings and the massive government aid received during the pandemic. Moreover, the job market is expected to downshift significantly and unemployment is projected to increase next year as the economy weakens.

A growing number of companies are opting to leave jobs vacant when employees leave or announcing hiring freezes. Widespread layoffs so far have been limited to the handful of industries hammered by rising interest rates, such as technology, housing and finance, say Mark Zandi, chief economist of Moody’s Analytics, and Jim McCoy, senior vice president of talent solutions for ManpowerGroup, a staffing firm.

The Federal Reserve, by increasing its benchmark interest rate to counter inflation, has raised the possibility of a downturn next year. Some experts believe that the Federal Reserve’s bid to contain inflation by increasing interest rate and tightening the money supply will likely achieve its target but put pressure on the consumer’s wallet and potentially trigger a recession in 2023.

Fifty-seven percent of the National Association for Business Economics (NABE) economists see more than a 50% chance of recession next year, according to the results of a new survey published by NABE. The survey pointed to the Federal Reserve’s continued raising the federal funds rate and tightening of monetary policy in an effort to tame inflation as the biggest challenge facing the economy.

Additionally, Gregory Daco, chief economist of EY-Parthenon, expects a recession to hit by the first half of 2023 as hiring slows and layoffs spread across industries, leading to net job losses for the year. He expects the economy to grow just 0.3% for the full year and unemployment to peak at 5.5%.

Many Americans believe that the U.S. economy and the global economy are already in a recession. However, with consistently strong job growth, historically low unemployment and solid growth in consumer spending, that doesn’t sound like a recession most people would remember.

But, a recession is in the eyes of the beholders. Essentially, “It depends on who you ask,” says Capital Group economist Jared Franz. “With food, energy and shelter prices all rising faster than wages, the average American consumer would probably say yes. In my view, we are either on the edge of a recession or we are already tipping into it.”

To put things in perspective, over the past 70 years the average U.S. recession has lasted about 10 months and resulted in a GDP decline of 2.5%. In Franz’s estimation, the next one may be worse than average, if current trends persist, but still less severe than the Great Recession from December 2007 to June 2009.

Key economic indicators point to a potential recession

Sources: Capital Group, Bureau of Economic Analysis, National Bureau of Economic Research, U.S. Department of Commerce.

The official arbiter of U.S. recessions, the National Bureau of Economic Research (NBER) considers many factors beyond GDP, including employment levels, household income and industrial production. Since NBER usually doesn’t reveal its findings until six to nine months after a recession has started, we may not get an official announcement of an economic recession until next year.

“It’s fair to say that most consumers probably don’t care what NBER thinks,” says Capital Group economist Jared Franz. “They see inflation above 9%, sharply higher energy prices and declining home sales. They feel the impact of those data points. The labor market is one of the only data points that isn’t signaling a recession right now.”

References:

  1. https://www.cnbc.com/2022/12/06/recession-walmart-jpmorgan-gm-ceos-talk-about-possible-slowdown.html
  2. https://www.msn.com/en-us/money/markets/is-a-2023-recession-coming-job-growth-likely-to-slow-sharply-companies-brace-for-impact/ar-AA159tMa
  3. https://www.foxbusiness.com/economy/labor-market-may-skirt-us-recession-nabe
  4. https://www.capitalgroup.com/advisor/insights/articles/is-us-already-in-recession.html

Warren Buffett’s Investing Top Four

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“Don’t look at a stock like it is a ticker symbol with a price that goes up and down on a chart. It’s a slice of a company’s profits far into the future, and that’s how they need to be evaluated.” ~ Warren Buffett, Chairman and CEO, Berkshire Hathaway

Warren Buffett’s philosophy is simple. Buy with a “margin of safety” undervalued companies with strong fundamentals and balance sheet, and then wait. It’s possibly the most boring way to invest in the world. But it’s effective.

For Warren Buffett, deciding what stocks to buy is “simple but not necessarily easy,” according to CNBC Warren Buffett Guide to Investing.

In his Berkshire Hathaway 1977 annual letter to shareholders, he listed four attributes he wanted to see when investing, whether he’s buying the entire company for Berkshire, or just a slice of it as a stock.

1. “One that we can understand…”

When Buffett talks about “understanding” a company, he means he understands how that company will be able to make money far into the future.

He’s often said he didn’t buy shares of what turned out to be very successful tech companies like Google and Microsoft because he didn’t understand them. At the 2000 annual meeting, a skeptical shareholder told Buffett he couldn’t imagine him not understanding something. Buffett responded, “Oh, we understand the product. We understand what it does for people. We just don’t know the economics of it 10 years from now.”

2. “With favorable long-term prospects …”

Buffett often refers to a company’s sustainable competitive advantage, something he calls a “moat.”

“Every business that we look at we think of as an economic castle… And you want the capitalistic system to work in a way that millions of people are out there with capital thinking about ways to take your castle away from you, and appropriate it for their own use. And then the question is, what kind of a moat do you have around that castle that protects it?”

— 2000 BERKSHIRE ANNUAL MEETING

A “moat” consists of things a company does to keep and gain loyal customers, such as low prices, quality products, proprietary technology, and, often, a well- known brand built through years of advertising, such as Coca-Cola. An established company in an industry that has large start-up costs that deter would be competitors can also have a moat.

3. “Operated by honest and competent people …”

“Generally, we like people who are candid. We can usually tell when somebody’s dancing around something, or where their — when the reports are essentially a little dishonest, or biased, or something.

And it’s just a lot easier to operate with people that are candid.

“And we like people who are smart, you know.

I don’t mean geniuses… And we like people who are focused on the business.” — 1995 BERKSHIRE ANNUAL MEETING

The quality of the business itself, however, takes precedence.

“The really great business is one that doesn’t require good management. I mean, that is a terrific business. And the poor business is one that can only succeed, or even survive, with great management.” — 1996 BERKSHIRE ANNUAL MEETING

4. “Available at a very attractive price.”

“The key to [Benjamin] Graham’s approach to investing is not thinking of stocks as stocks or part of a stock market. Stocks are part of a business. People in this room (Berkshire shareholders) own a piece of a business. If the business does well, they’re going to do all right as long as they don’t pay way too much to join into that business. — 1997 BERKSHIRE ANNUAL MEETING

Buffett’s goal is to buy with a “margin of safety” or when the market price is below a company’s “intrinsic value.” Buffett has said that the margin of safety is the “most important concept in investing.”

“The three most important words in investing are margin of safety…” ~ Warren Buffett

“The intrinsic value of any business, if you could foresee the future perfectly, is the present value of all cash that will be ever distributed for that business between now and judgment day.

“And we’re not perfect at estimating that, obviously.

“But that’s what an investment or a business is all about. You put money in, and you take money out.

“Aesop said, ‘A bird in the hand is worth two in the bush.’ Now, he said that around 600 B.C. or something like that, but that hasn’t been improved on very much by the business professors now.” — 2014 BERKSHIRE ANNUAL MEETING

References:

  1. https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2022/03/22/bwp22links.pdf

Focus, Discipline and Patience are Wealth Building Super Powers!

Gratitude

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“I have every possession I want. I have a lot of friends who have a lot more possessions. But in some cases, I feel the possession possesses them, rather than the other way around.” ~ Warren Buffett

Never allow all the things you selfishly covet or you want make you forget about all the things you have or currently possess. Put a little gratitude in your life today and be thankful for all you already possess.

Moreover, happiness doesn’t mean everything is pleasing or perfect. Instead, happiness means that you can choose to see beyond the problems and imperfections, and embrace an attitude of gratitude.

The endless pursuit of hollow amenities and fruitless assets that barely add any value to your life are often so intoxicating that people loose sight of things that truly make them happy and bring them joy such as personal relationships, joy and peace in abundance.

“Sometimes you have to stop staring at your problems and start seeing how beautiful life really is.” ~ Anonymous

Don’t wait for great. Be Great everyday! Don’t allow a little negativity keep you from feeling grateful for everything that is going right and for everything that is good and pleasing in your life.

Gratitude must become a 24 hour / 365 day mindset, so that you don’t take what you have for granted.

Research shows that gratitude can:

  • Help you make friends. One study found that thanking a new acquaintance makes them more likely to seek a more lasting relationship with you.
  • Improve your physical health. People who exhibit gratitude report fewer aches and pains, a general feeling of health, more regular exercise, and more frequent checkups with their doctor than those who don’t.
  • Improve your psychological health and emotional well-being. Grateful people enjoy higher wellbeing and happiness and suffer from reduced symptoms of depression.
  • Enhance empathy and reduces aggression. Those who show their gratitude are less likely to seek revenge against others and more likely to behave in a prosocial manner, with sensitivity and empathy.
  • Improve your sleep. Practicing gratitude regularly can help you sleep longer and better.
  • Enhance your self-esteem. People who are grateful have increased self-esteem, partly due to their ability to appreciate other peoples’ accomplishments.
  • Increase in mental strength. Grateful people have an advantage in overcoming trauma and enhanced resilience, helping them to bounce back from highly stressful situations.

References:

  1. https://positivepsychology.com/gratitude-exercises/

May you have Peace, Joy and Patience in Abundance!

988 Suicide and Crisis Lifeline

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The National Suicide Prevention Lifeline is now: 988 Suicide and Crisis Lifeline.

988 has been designated as the new three-digit dialing code that will route callers to the National Suicide Prevention Lifeline (now known as the 988 Suicide & Crisis Lifeline), and is now active across the United States.

The Lifeline provides 24/7, free and confidential support for people in distress, prevention and crisis resources for you or your loved ones, and best practices for professionals in the United States.

When people call, text, or chat 988, they will be connected to trained counselors that are part of the existing Lifeline network. These trained counselors will listen, understand how their problems are affecting them, provide support, and connect them to resources if necessary.

The previous Lifeline phone number (1-800-273-8255) will always remain available to people in emotional distress or suicidal crisis.

How To Take Care Of Yourself

If you’re struggling, you can call or chat with the Lifeline, which is available 24/7 and confidential. There are crisis counselors available to listen and support you without judgment. Additionally, if you’re struggling, you can:

Make a safety plan: Have a step-by-step plan ready for if/when you feel depressed, suicidal, or in crisis, so you can start at step one and continue through the steps until you feel safe. Creating a safety plan can include listing your coping strategies, identifying the people in your life that may support you through a crisis, and more.

Limit your news consumption. The constant replay of news stories about traumatic events can increase stress and anxiety. Try to reduce the amount of news you watch, read or listen to, and engage in relaxing activities instead.

References:

  1. https://988lifeline.org
  2. https://988lifeline.org/help-yourself/black-mental-health/

Producer Price Index (PPI)

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The Producer Price Index (PPI) came in higher than expected:

  • Expectations: 7.2%
  • Actual: 7.4%

Producer Price Index (PPI) came in above estimates on both headline (7.4% vs 7.2% estimate) and core (6.2% vs 5.9% estimate), comments Liz Young, Chief Investment Officer, SoFi. The Producer Price Index measures inflation at the wholesale level, which acts as kind of a leading indicator.

Inflation remains high, but is trending down, because the main driver of inflation is not interest rates. Instead, the main driver of inflation is excessive fiscal deficit spending and loose monetary policy.

Although, PPI is still falling moderately on a year-over-year basis, but any future upside surprises don’t bode well for upcoming Consumer Price Index (CPI) numbers which will be released next week.

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

Holiday Online Cybersecurity

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“By following a few guiding principles like checking your devices, shopping from trusted sources, using safe purchasing methods, and following basic cyber hygiene like multi-factor authentication, you can drastically improve your online safety when shopping online for gifts this year. Your cyber safety should be treated like your physical safety. Stay vigilant, take steps protect yourself, and trust your instincts. If you see something that doesn’t look right, there’s a good chance it isn’t.” ~ Jen Easterly, Director, Cybersecurity and Infrastructure Security Agency (CISA)

It’s imperative that Americans stay safe online this holiday season. In the coming weeks, millions of Americans will be looking for the best deals on the internet. Meanwhile, cyber criminals will be hard at work looking to target online shoppers. 

The holiday shopping season is a prime opportunity for bad actors to take advantage of unsuspecting shoppers through fake websites, malicious links, and even fake charities.

Their goal is simple: get your personal and financial information to compromise your data, deploy malicious software, steal your identity, and take your money. But with some simple actions, you can stay safe while you shop online.

The Cybersecurity and Infrastructure Security Agency (CISA) is committed to helping Americans better protect themselves online. This holiday shopping season, they want to provide a few easy steps to prevent you from becoming a victim of cyber-crime.  

Using strong passwords, updating your software, thinking before you click on suspicious links, and turning on multi-factor authentication are the basics of what they call “cyber hygiene” and will drastically improve your online safety.  

Here are the 4 common sense ways to protect yourself online:

  • Implement multi-factor authentication (MFA) on your accounts and make it much less likely you’ll get hacked. Multi-factor authentication (or two-factor authentication), uses multiple pieces of information to verify your identity. Even if an attacker obtains your password, they may not be able to access your account if it’s protected by this multiple step verification process.  
  • Update your software. In fact, turn on automatic updates.  
  • Think before you click. Most successful cyber-attacks start with a phishing email.  
  • Use strong passwords, and ideally a password manager to generate and store unique passwords. 

Before making any online purchases, make sure the device you’re using to shop online is up-to-date. Next, take a look at your accounts and ask, do they each have strong passwords? And even better, if multi-factor authentication is available, are you using it?  

Before providing any personal or financial information, make sure that you are interacting with a reputable, established vendor.

Some attackers may try to trick you by creating malicious websites that appear to be legitimate. Always verify the legitimacy before supplying any information. If you’ve never heard of it before, check twice before handing over your information.

References:

  1. https://www.cisa.gov/shop-safely
  2. https://www.cisa.gov/news/2022/11/23/cisa-reminds-online-shoppers-stay-vigilant-cyber-threats-holiday-season

National State of Emergency in Children’s Mental Health (An Unreported Crisis by Major Media Outlets)

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By 2018, suicide was the second leading cause of death for youth ages 10-24.

Health professionals, who are dedicated to the care of 73 million American children and adolescents, have witnessed soaring rates of mental health challenges among children, adolescents, and their families over the course of the COVID-19 pandemic. This has prompted the American Academy of Pediatrics (AAP), the American Academy of Child and Adolescent Psychiatry (AACAP) and the Children’s Hospital Association (CHA) to join together to declare a National Emergency in Child and Adolescent Mental Health.

Nationally, adolescent depression and anxiety — already at crisis levels before the pandemic — have surged amid the isolation, disruption and hardship of COVID-19. Children and families across our country have experienced enormous adversity and disruption, writes the American Academy of Pediatrics.  The inequities that result from structural racism have contributed to disproportionate impacts on children from communities of color. 

In the declaration, the groups emphasize that young people in communities of color have been impacted by the pandemic more than others and how the ongoing struggle for racial justice is inextricably tied to the worsening mental health crisis.

And, this worsening crisis in child and adolescent mental health is inextricably tied to the stress brought on by COVID-19 and the ongoing struggle for racial justice and represents an acceleration of trends observed prior to 2020.

Rates of childhood mental health concerns and suicide rose steadily between 2010 and 2020 and by 2018 suicide was the second leading cause of death for youth ages 10-24.

“Young people have endured so much throughout this pandemic and while much of the attention is often placed on its physical health consequences, we cannot overlook the escalating mental health crisis facing our patients,” AAP President Lee Savio Beers, M.D., FAAP, said in a statement. “Today’s declaration is an urgent call to policymakers at all levels of government — we must treat this mental health crisis like the emergency it is.”

The pandemic brought on physical isolation, ongoing uncertainty, fear and grief.

The Centers for Disease Control and Prevention researchers quantified that toll in several reports. They found between March and October 2020, emergency department visits for mental health emergencies rose by 24% for children ages 5-11 years and 31% for children ages 12-17 years. In addition, emergency department visits for suspected suicide attempts increased nearly 51% among girls ages 12-17 years in early 2021 compared to the same period in 2019.

In other research, the CDC found nearly 45 percent of high school students were so persistently sad or hopeless in 2021 they were unable to engage in regular activities. Almost 1 in 5 seriously considered suicide, and 9 percent of the teenagers surveyed by the CDC tried to take their lives during the previous 12 months.

In short, the pandemic has intensified this crisis: across the country mental health professionals have witnessed dramatic increases in Emergency Department visits for all mental health emergencies including suspected suicide attempts.

References:

  1. https://www.aap.org/en/advocacy/child-and-adolescent-healthy-mental-development/aap-aacap-cha-declaration-of-a-national-emergency-in-child-and-adolescent-mental-health
  2. https://publications.aap.org/aapnews/news/17718
  3. https://www.washingtonpost.com/education/2022/12/05/crisis-student-mental-health-is-much-vaster-than-we-realize/

U.S. Naval Base Pearl Harbor, December 7, 1941

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The Japanese plan was simple on the morning of Sunday, December 7, 1941: Destroy the U.S. Pacific Fleet.

Pearl Harbor is a U.S. naval base near Honolulu, Hawaii. It is located near the center of the Pacific Ocean, roughly 2,000 miles from the U.S. mainland and about 4,000 miles from Japan.

No one in the military, in the intelligence community, or in the President Roosevelt Administration believed that the Japanese would start a war with an attack on the distant islands of Hawaii.

Additionally, American intelligence officials were confident that any Japanese attack would take place in one of the (relatively) nearby European colonies in the South Pacific.

However, at about 8 a.m. on the morning of Sunday, December 7, 1941, Imperial Japanese Navy planes filled the sky over Pearl Harbor and attacked with bombs, torpedoes and strafing gunfire. In less than two hours, the surprise attack resulted in the eight battleships moored in Pearl Harbor sustaining significant damage.

In all, the Japanese attack on Pearl Harbor crippled or destroyed nearly 20 American ships and more than 300 airplanes. Dry docks and airfields were likewise destroyed.

The attack also killed 2,403 U.S. personnel, including sailors, soldiers and civilians. Additionally, 1,178 people were wounded. 129 Japanese soldiers were killed. Half of the dead U.S. personnel at Pearl Harbor were on board the battleship, USS Arizona.

Japanese failed to cripple the Pacific Fleet.

By the 1940s, aircraft carriers had become the most important naval warship, and as it happened, all of the Pacific Fleet’s carriers were away from the base on the morning of December 7, 1941.

Moreover, the Pearl Harbor assault had left the base’s vital onshore facilities—oil storage depots, repair shops, shipyards and submarine docks—intact. As a result, the U.S. Navy was able to rebound relatively quickly from the attack.

References:

  1. https://www.history.com/topics/world-war-ii/pearl-harbor