Forecast: Threats to Recovery in Oven Before Putin Turned Up the Heat

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The U.S. market is once again nearing full employment, but high oil and gasoline prices, rising inflation, labor shortages and a malfunctioning supply chain threaten the economic recovery — and that was before Russia invaded Ukraine, according to the latest U.S. Forecast from UCF’s Institute for Economic Forecasting.

“The layer cake of economic problems we currently face was baked via COVID-19 policies,” says Sean Snaith, a national economist and the director of the Institute for Economic Forecasting, within the Winter 2022 U.S. Forecast. “Vladimir Putin just put the icing on the cake. High oil and gasoline prices are tied to COVID-19 policies that drove down demand during the lockdowns and led to a decrease in production. Russia’s invasion of Ukraine only served to speed up price increases that were long underway.”

Before the start of the war in Ukraine, consumer price inflation was approaching 8%, fewer people were returning to work,…

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