National Retail Federation Reports Potential Economic Impacts of the Omicron Variant; Jack Kleinhenz Discusses
WASHINGTON, DC - As the pandemic continues to impact the supply chain, transportation, and costs across many industries, the rise of the COVID-19 omicron variant has created new uncertainties about the effects on the economy. Recently, National Retail Federation Chief Economist Jack Kleinhenz postulated on how the variant could contribute to inflation.
“Even with the experience of the past two years, there is no model that can predict how the economy responds to a pandemic,” said Kleinhenz. “What we have learned is that each successive variant has slowed down the economy but that the degree of slowdown has been less.”
His comments come as part of the January issue of NRF’s Monthly Economic Review, which in itself said that 2022 will likely be another challenging year with many questions yet to be answered, according to a release. One of these key questions is how high inflation will rise and how long it will last, while another was whether or not supply chain issues will soon be resolved.
Inflation has recently been driven by shortages of goods as COVID-19 caused factories to shut down and has led to supply chain disruptions.
“Inflation started gradually and then came on strong, but clearly heated up during 2021 and has become a formidable factor facing the economy and especially consumers,” Kleinhenz added. “What is ironic is that the monetary and fiscal policy that pulled the economy out of the recession has prompted unprecedented growth that is now undermined by accelerating prices."
With omicron now added into the mix, Kleinhenz went on to address the potential impacts the variant could have on consumer spending habits, and therefore its effects on inflation.
“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,” he remarked. “That would put further pressure on inflation since supply chains are already overloaded across the globe.”
To read the statement in full, click here.
With the impacts of COVID-19, the omicron variant, and inflation not set in stone, we are left to wonder what the potential impacts could be for retail, foodservice, and the fresh produce industry.
As more updates become available, AndNowUKnow will bring you the latest news.