The last batch of data on the pre-war U.S. economy suggests that American society had been managing the unwelcome price increases associated with the pandemic relatively well.

Rapid income growth ensured that most consumers were able to keep buying more and more goods and services (albeit at higher prices) without having to take on debt or eat into savings. As a result, Americans across the income distribution continued to get richer and continued to amass larger holdings of cash and equivalents right up until the Russian invasion of Ukraine.

This isn’t to deny that higher prices have been painful for some consumers, or that the pre-war inflation had the potential to turn into a serious problem if left unchecked. But it’s worth noting that American living standards were rising—not falling—before the Russian invasion of Ukraine.

Getting Real