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In a matter of months, US consumers made up for twelve years of below-trend retail spending. America’s sclerotic supply chains couldn’t keep up with the surge in demand. The result was the highest inflation rate since 1982.

Now, it seems, consumers are refusing to pay the higher prices. Retail sales adjusted for the Consumer Price Index were about 4% lower in December than in October. The retailers evidently miscalculated, as the unprecedented jump in inventories indicates.

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With the average monthly rent in the US up 14% year-on-year, according to the Zillow Index, there are probably another two or three percentage points of CPI increase built into the 2022 data. The shelter component of CPI lags behind changes in the Zillow Index by up to eight months.

As rates rise, moreover, fewer people can afford to buy homes and must rent instead. That keeps upward pressure on rent inflation, and that in turn keeps pressure on the Federal Reserve to raise interest rates. That doesn’t add up to a US recession in 2022, but it points to rising inflation, economic weakness and a soggy stock market.

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Originally posted by Jongsstraw:
No real supply problem here in So. Fla., although last week Einstein Bros. Bagels in Weston was all out of salmon spread. I couldn't get my usual shmear on my toasted everything bagel. Just getting over that horror now.

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