High inflation might strain holiday budgets
Nov 10, 2021, 12:47 PM
Zion's Bank Senior Economist Robert Spendlove gives national and local economic update at The Hive Market in Salt Lake City, Utah on Nov. 10, 2021 (Nick Wyatt, KSL Newsradio)
(Nick Wyatt, KSL Newsradio)
SALT LAKE CITY — Inflation, supply chain problems, and a labor shortage might make for a complicated holiday shopping season this year.
Senior Economist @SpendloveRobert w/@ZionsBank gives an economic update at Hive Market in Trolley Square, says Utah inflation up 7% @kslnewsradio pic.twitter.com/RTqCOUlxoY
— Nick Wyatt (@NickWyattNews) November 10, 2021
Holiday budgets on par for previous years
Americans plan to spend an average of $1,000 this holiday season on gifts and other things, according to the National Retail Federation.
The NRF says this projection is about equal to what people spent last year, but less than the pre-pandemic holiday season of 2019.
“The struggle, though, is that holiday budgets won’t stretch as far this year,” said Robert Spendlove, Zion’s Bank Senior Economist.
Shoppers will get less for their money than in years past as a result of ongoing supply chain problems, labor shortages, and inflation.
Highest inflation in decades
The October Consumer Price Index produced by the U.S. Department of Labor shows inflation rose 6.2% last month. That is the highest jump in three decades. Inflation jumped 1% between September and October alone.
The report shows gas prices increased by 49.6% over the last year, costs of used cars and trucks increased 26.4% percent, and meat prices are up by over 20%.
Unfortunately, the regional numbers are even higher.
“In our region where Utah is, we saw inflation go up 7%,” Spendlove explained. “Meanwhile, we’re also seeing that producer prices…have jumped 8.6% over the last year.”
The economist noted the increases on the production side might mean the inflation bump is here to stay.
“I expect that these kinds of price pressures and the inflation that we’re seeing now…will continue into 2022, maybe mid-22,” said Spendlove.
As has been the case for several months now, Spendlove said high consumer demand and low supply are driving the price increases.
Utah economy soaring
Despite these worrying numbers, there is a clear silver lining: Utah’s economy is booming, Spendlove added.
“Utah has the strongest economy in the country. Idaho is right with Utah,” he said.
The soaring economy might explain why consumer confidence in the Beehives State is currently higher than the national average.
Blog: Salt Lake County, Utah’s Premiere Economy #utpol #utecon @SLCoRegionalDev https://t.co/vi6jHoE1jN
— Kem C. Gardner Policy Institute (@KemGardnerInst) November 4, 2021
Another possible upside to the global and national turmoil is the potential boost to local businesses.
Spendlove also highlighted that the number of jobs in Utah since the start of the pandemic is higher than the national average.
