{"id":38713,"date":"2022-06-06T10:56:00","date_gmt":"2022-06-06T10:56:00","guid":{"rendered":"https:\/\/harchi90.com\/consumers-have-to-face-that-nasty-inflation-is-here-to-stay-for-a-while-morning-brief\/"},"modified":"2022-06-06T10:56:00","modified_gmt":"2022-06-06T10:56:00","slug":"consumers-have-to-face-that-nasty-inflation-is-here-to-stay-for-a-while-morning-brief","status":"publish","type":"post","link":"https:\/\/harchi90.com\/consumers-have-to-face-that-nasty-inflation-is-here-to-stay-for-a-while-morning-brief\/","title":{"rendered":"Consumers have to face that nasty inflation is here to stay for a while: Morning Brief"},"content":{"rendered":"
\n

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 am ET. <\/em><\/strong>Subscribe<\/strong><\/p>\n

Monday, June 6, 2022<\/p>\n

Today’s newsletter is by <\/em>Brian Sozzi<\/em>an editor-at-large and <\/em>anchor at Yahoo Finance<\/em>. Follow Sozzi on Twitter <\/em>@BrianSozzi<\/em><\/a> and on <\/em>LinkedIn<\/em>.<\/em><\/p>\n

“It’s a very challenging time right now with inflation,” US Labor Secretary Marty Walsh told Yahoo Finance Live on Friday (video above).<\/p>\n

Indeed, and the reality is nasty inflation is here to stay at least into 2023. Sure, we could get the mild recession some policymakers seem to want, and inflation may cool down as a result, but don’t expect prices to pullback to levels you once deemed reasonable. If you want a new pair of jeans, as Levi’s CFO Harmit Singh told me recently, buy them now.<\/p>\n

Why are these brutal inflationary forces continuing? It’s simple: There are structural issues amid the post-pandemic world that are feeding the inflation beast.<\/p>\n

Skilled workers are too few in number to meet the needs of post-pandemic businesses, leading wages to climb. Even in a recession, skilled workers will be required to meet the demand is being seen. Supply chains are still stuck overseas, where the cost of labor and transportation remains on the climb.<\/p>\n

Those issues will hamper semiconductor production until 2024, Intel’s CEO Pat Gelsinger told me. Oil doesn’t grow on trees, and it has become a renewed political chess piece. That suggests prices above $ 100 a barrel (or higher …) as a new normal.<\/p>\n

Jefferies Chief Economist Aneta Markowska summed these trends up nicely in a new note to clients:<\/p>\n

“The tightness in the labor market is allowing labor to extract concessions on wages, bonuses and benefits, causing labor costs to ‘chase’ prices higher. This will make it difficult for inflation to decelerate significantly from here as businesses now have to pass higher costs back to consumers in order to preserve margins.<\/em><\/p>\n

Meanwhile, ample cash and borrowing capacity is allowing consumers to absorb higher prices despite negative real wages, which sustains the positive feedback loop. “<\/em><\/p>\n