Don't know much about economy

[question everything]

let me see if I understand this:

we have more jobs, people have more money, they spend it and create demand. Demands causes prices to rise and this causes inflation, resulting in increase in the prime rate and in the cost of credit?

Stock market tanks, wiping the values of retirement and saving funds..

The increase in cost of credit means expenses are higher for employers so... they let people go, unemployment rises, prime rate is lowered as is the cost of credit?

What am I missing?