Spending on goods could take precedence over meals and entertainment

The impact of omicron on consumer demand is unclear, but people who stay home because of the variant are more likely to spend their money on retail products rather than dining out. or to have fun in person, depending on National Retail Federation Chief Economist Jack Kleinhenz.

Kleinhenz noted in the NRF’s January Monthly Economic Review that such a scenario would put additional pressure on inflation “since supply chains are already overloaded across the world.”

Inflation, which was driven by commodity shortages as COVID-19 closed factories and scolded supply chains as government stimulus fueled consumer spending, is expected to continue into 2022, but should eventually slow down, the NRF said.

The monthly review added, “Consumer spending has propelled growth in 2021 and will continue to be a bright spot as 2022 unfolds. The current recession recovery cycle is very different from previous ones. Consumers have never been so wealthy as they are today. In fact, consumer wealth increased 18.1% year-on-year in the third quarter, well outpacing inflation.

“If there’s one lesson we’ve learned, it’s not to underestimate the resilience of the consumer and, therefore, of the US economy.”

Fed suggests supply chain disruptions may have peaked

During this time, Fed forecast about stabilizing supply chain disruptions add to the narrative that supply chain dysfunction may be easing.

A new “global supply chain pressure barometer“from the Federal Reserve Bank of New York suggests that” global supply chain pressures, although historically high, have peaked and may begin to moderate somewhat in the future.

The NRF report was released on Wednesday as retailers await the release next week of Census Bureau retail sales data in December, which will complete the official sales total during the 2021 holiday season.

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