July 5, 2022

Inflation Expected to Remain High Even as Economy Slows and Layoffs Rise

“The hunger of children is not a necessary cost to pay to bring down inflation,” Ms. Ananat, of Barnard, said.

Republicans, meanwhile, have blamed the Biden administration — and in particular, the $1.9 trillion American Rescue Plan that Democrats passed early last year — for making inflation worse. Many economists, among them Democrats, agree that the spending did drive at least some of the inflation, making the politics of economic aid even more fraught.

The economy remains strong for now, but early signs of a pullback are surfacing. Job growth, while fast, is slowing. Jobless claims, still low, have picked up. Evictions are mounting in some cities where bans have expired, and retail sales fell in May.

“I think we are starting to see indications that the good times are coming to an end for some people,” said Karen Dynan, a former Treasury Department chief economist who is now at Harvard University. “There will be some generalized pain.”

For many families, that pain has already arrived, and it feels very specific.

Brandy Sandersfeld gave birth to a boy in March 2020 — the same week that her older son’s school shut down because of the pandemic, and the month that her husband’s pizza business had to close for good.

After a few months of trying to ride out the pandemic, Ms. Sandersfeld and her husband, Kurtis, moved to a more rural part of their home state of Arkansas, where they owned some land. Unemployment benefits helped pay for the move, and last year the expanded child tax credit provided a much-needed financial cushion. Those payments ended in January — just before Ms. Sandersfeld, 37, hit a deer in her S.U.V. Replacing it wiped out their savings.

Article source: https://www.nytimes.com/2022/06/17/business/economy/inflation-economy-recession.html

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