Writer: Sara Suarez
2 min read August 2022 — While consumer prices decreased in parts of New Jersey last month, leaders continue pointing to inflation as the most pressing issue moving forward.
“The No. 1 issue for the upcoming year is going to be inflation. Across all industries, costs are going up,” said Timothy Guim, president and CEO of PCH Technologies with Invest:.
For the New York-Newark-Jersey City area, the Consumer Price Index for All Urban Consumers (CPI-U) showed a 0.3% decrease in July as well as a lower year-over-year inflation rate of 6.5% compared to the national percentage of 8.5. As a nation, the CPI-U remained unchanged on aggregate for the month of July compared to June, thanks in part to the largest release of oil reserves in history by the Biden administration to offset rising gas prices. While the aggregate remained unchanged, food prices continued their rise by 1.1% for the month.
“Inflation is going to continue to be a difficult outlier to handle as well as continuing supply chain issues. The geopolitical instability adds noteworthy stress to an already challenging economic market,” said Brian Jones, president & CEO of First National Bank of Elmer, with Invest:. “All indications are that rates are going to continue to rise, slowing demand and growth.”
The Fed has projected a median federal funds rate of 3.4% by the end of 2022. As the Fed raises rates to curb inflation, there is fear over the negative impacts this could have on the economy.
Last Sunday, the Senate passed the Inflation Reduction Act. The bill seeks to tackle inflation but also comes with investments in domestic energy production, manufacturing and reducing carbon emissions. The Senate voted among party lines with 50 democrats voting in favor, 50 Republicans opposing it and Harris breaking the tie in favor of the bill. Biden issued a press release saying he looks “forward to signing into law.”
U.S. Federal Reserve Chair Jerome Powell as well as other global central bank chiefs have recently stated inflation as their immediate priority at the European Central Bank’s annual conference. “The process is highly likely to involve some pain but the worst pain would be from failing to address this high inflation and allowing it to become persistent,” said Powell.
“These are uncertain times with consumer spending down, inflation up, supply chain issues, energy prices up, labor shortages and this is all happening at once,” said Corey Apirian, CEO of Davinci Micro Fulfillment, with Invest:.
