Americans’ penchant for nonstop shopping during the ongoing COVID-19 pandemic is likely to trigger increased inflation, according to National Retail Federation chief economist Jack Kleinhenz in an announcement by the group Wednesday (Jan. 5).
Kleinhenz doesn’t expect the latest flood of coronavirus cases across the U.S. and around the world, fueled in large part by the omicron variant, to lead to an economic slowdown or a total business shutdown.
“Little is certain about omicron’s impact on consumer demand, but people who stay at home because of the variant are more likely to spend their money on retail goods rather than services like dining out or in-person entertainment,” Kleinhenz said in the release. “That would put further pressure on inflation since supply chains are already overloaded across the globe.
“Each successive variant has slowed down the economy but that the degree of slowdown has been less.”
Consumers may feel more confidence when it comes to spending if they are fully vaccinated or if they continue to hear reports that the omicron variant is milder than some of the others, said Kleinhenz.
The U.S. seven-day average of new COVID-19 infections is more than 553,000 through Tuesday (Jan. 4) — more than double the previous week, according to a CNBC analysis of Johns Hopkins University data.
Related: Antitrust Won’t Help to Fight Inflation, Says Former Treasury Sec Larry Summers
Former Treasury Secretary Larry Summers tweeted on Dec. 28 that the Biden administration is trying to use antitrust policy to fight inflation — and that strategy won’t work.
Biden is reportedly seeking help from antitrust enforcers to try to tame price increases across the country, asking government agencies and independent agencies to identify possible anticompetitive behaviors in the U.S. economy.
Most economists agree that using antitrust policy is not the right tool to fight inflation. Summers tweeted that “hipster Brandeisian antitrust,” which has many followers in the Biden administration, could raise prices rather than lowering them.
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