If you were hoping to experience an end to the increase inflation that we’ve seen over the past 18 months, economists are painting a picture that reveals tougher days might still be ahead.
The latest variant of the coronavirus, the omicron variant, is being blamed for the economic instability that Americans had hoped would soon come to a halt.
Joe Krier, president of IIWII Trading LLC, says investors were hopeful that in spring of 2022 inflation would decrease following the rollout of economic stimulus packages in 2020 and 2021. Instead, new COVID-19 variants continue to cause concern, creating an unpredictable fiscal environment.
“The idea was all the stimulus money that went into people’s pocketbooks would cause prices to go up for six, eight, 10 months, and once everyone spent their money everything would go back normal,” Krier explained. “But what’s happening is because it’s been hard to get semiconductors, and even help to staff restaurants, the prices and wages and materials has gone up.”
With the omicron variant now detected in most states, it’s prompted the cancelation of high profile events like Broadway shows and basketball games. It’s reigniting fears for travelers during the holidays and causing some companies to rethink returning to their office full-time.
From October 2020 to October 2021, during the height of COVID, the consumer price index rose from 6.2% -- the most rapid 12-month increase in prices in more than 30 years.
Krier says unfortunately, an increase in prices for everyday items may be a permanent trend.
“Anything that is labor intensive and food would be in that category that certainly stays higher for longer, and anything that has a narrow pinch point, like oil, only has a few hotspots in the world, and there’s not that much extra out there, and prices can go up drastically if we continue to get pinched,” he said. “Semiconductors are another area.”