Part 7/10:
As COVID-19 restrictions ease and vaccination efforts accelerate, American consumers are expected to increase spending significantly. During the winter months, spending was held back due to social restrictions and harsh weather conditions. Now, with the coming of warmer weather and the easing of restrictions, there’s a pent-up demand fueled by substantial savings accumulated during lockdowns.
If pent-up demand translates into sharp increases in consumer spending, inflationary pressures could rise notably in the second quarter. This scenario raises concerns among analysts, who consider inflation a potential side effect of aggressive fiscal stimulus and economic recovery.