Inflation is believed to be the greatest economic challenge next year in the U.S., as the Omicron strain, the rebound in consumer demand, and supply chain issues will prolong into 2022. Prices have increased at the fastest rate in 40 years.
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Inflation Pains In 2022
As reported by The Washington Post, inflation is set to be the main challenge next year after consumer prices smashed experts’ predictions in 2021. While the U.S. economy recovered, groceries, rent, and used cars soared to historic highs.
The increase hit consumers hard and dampened purchasing power, and it also put the Federal Reserve in a compromising position as it had estimated much less inflation. Meanwhile, even the White House faced questions from some Democrats who were concerned about the possibility of plans for more federal spending pushing inflation higher.
“Citing the higher costs of ingredients, transportation logjams, labor shortages, and higher wages, many food manufacturers announced price increases for 2022,” The Washington Post reports.
“Rents are locking in at higher prices as the broader housing market soars. Vehicle production, still strapped by the global microchip shortage, means prices for new and used cars aren’t settling down soon.”
Concerning Food Prices
As to how long inflation will last, RSM chief economist Joe Brusuelas said: “Regardless of how you look at it, inflation is going to be with us for a good period of time.”
Food inflation will be an item experts are turning their eye to since it is bound to grow in 2022. The price of certain snack products is bound to reach 7% in January as consumer demand keeps on a high.
“Price increases will hit all parts of the grocery store but will vary by category — the cost of items in bottles and cans will continue to rise due to the limited availability of the containers themselves.”
Scott Bennett, director of congressional relations at the American Farm Bureau Federation, says “It’s concerning to see the price of beef at the grocery store. At what point does it get that beef just isn’t sold because the rent’s too high? Beef competes with poultry and pork."
