Inflation isn't going anywhere, according to the chairman of the Federal Reserve. So a San Diego investment strategist is sharing tips for beating it.
"When we are putting all that money into the supply, we have more money chasing less goods. That really causes what I believe is going to be the longer-term inflation," John Immarino of Securus Financial explained.
Immarino is not painting a rosy picture this holiday season. He hasn't lost his holiday spirit, but his best advice is to manage your own wallet.
"Control what you can control, and that’s your spending,” Immarino said.
Right now the economy is caught in a perfect storm between transitory and long-term inflation, Immarino said. The transitory spike in inflation was caused by the COVID-19 shutdowns, unemployment, and consumer goods sitting on docks instead of shelves.
Now, according to Immarino, the omicron variant is threatening to make things worse.
"These variants can very well either keep the supply chain where it is at or actually exacerbate the problem if we have another shutdown," he said.
Immarino said long-term inflation is fueled by government spending.
"Nothing is free. Everything comes at a cost, and with the injection of all that money, the more money that is printed the less it’s worth," he explained. "The supply chain will eventually get back to normal sooner than later. That will ease some of the major spikes we’ve seen but I think inflation is going to be here to stay."
Immarino thinks the U.S will see the impacts of inflation for at least the next 24 months.
Year over year, the cost of rental cars and trucks is up 88%, the price of used cars and trucks is up 45%, gas is up 45%, airfare is up 25% and hotels are up 17%, according to data from the Bureau of Labor Statistics.
"Longer term, you have to be aware of your spending," Immarino said. "You have to be aware of your debt because inflation erodes purchasing power.”
To ride out the storm, Imarrino suggests making inflation hedge investments, reducing your overhead, paying attention to your year-end credit summary and looking for ways to cut back on spending.
"'I want a ribeye steak and I’m not going to look at the price.' Now is the time to start paying attention a little bit more at the cash register," he said.
2022 may not be the year for large or luxury purchases. Immarino says if you can, wait on that new or used car until supplies meet the demand. You’ll not only pay less but by then, gas might be cheaper too.
Retail industry analysts say despite higher prices, lower discounts, and the omicron variant, the number of Black Friday shoppers was up this year. Stores saw about 105 million customers over the weekend compared to 92 million last year.
At the same time, the overall number of online shoppers decreased from 145 million last year to about 128 million.