Inflation is a global issue, impacting local economies and driven by the ongoing impact of the pandemic crisis on supply chains, elevated demand, the war in Ukraine, and climate-related crop and harvest issues. In 2021, the risk was on the upside, as demand for goods continued to surge and consumers returned to spending on services like restaurants; in 2022, it is a downside risk as consumers’ spending expectations are falling as they struggle with high inflation.

In early 2022, U.S. consumers continued to open their wallets amid record inflation. Not surprising, considering that U.S. consumers had approximately $3.3 trillion more in savings than they had in 2019. As pandemic restrictions eased, many savers dipped into those reserves, while others turned to credit cards. More than two-thirds of the U.S. economy is fueled by consumer spending which has held strong through the Spring despite inflation’s historic highs.