Rising Inflation could signal beginning of recession, warn major US Banks
DELMARVA- Financial institutions, including Bank of America, are warning, that high inflation levels could take the US from a slowing recovery all the way to a recession within the next few months.
A new report from the bank found key indicators of growth like house building, private equity investment and loans are dropping, despite actions from the US Fed to curb inflation and purposely slow down the economy using raised interest rates.
The consumer price index found that prices are fast approaching a level that consumers will no longer accept, which could lead to a spending drop that further accelerates the decline.
Salisbury Area Chamber of Commerce President Bill Chambers tells us, he predicts the recession could be in full swing by the summer, and warns that many industries on Delmarva including restaurants and hotels could see themselves returning to peak-pandemic conditions.
He says outside the rising prices, he expects restaurants to pivot to only being open a few days a week, while hotels struggle to keep staffing and afford operations.
He tells us businesses will have to raise prices, cut staff, or both, and many will not be able to handle recession times where consumers are less likely to spend on perceived luxury items such as eating out and vacations.
“On Delmarva, you are going to see this in all of your hospitality and restaurant industries your gonna see it in favorite local retailers and your local chain and big box stores will begin to slowly increase prices,” he said.
He tells us through the Chamber’s influence is limited there is a way to help local businesses. Chambers tells us the Chamber of Commerce will continue to push the Hogan administration to give tax incentives to businesses and push on the federal level to get the restaurant relief fund-replenished and easier to use for most businesses.