If Americans reconsider trips, dining out and/or make any other lifestyle changes due to concerns for the variant, “in the near future, it would take the edge off inflation concerns because it would mean less demand,” said the chief economist at Moody’s.
As a result of pent-up demand, consumers are paying 5.4% more than last year across the board for goods and services, according to the July Consumer Price Index. The prices of shelter, food, energy costs and new cars drove inflation last month.
Before delta accounted for the majority of cases and after millions of Americans got vaccinated, many people began to experience a glimpse of life what might feel after the pandemic. Millions boarded planes, took road trips, dined out, went to concerts and sporting events in person for the first time in more than a year-and-a-half.
Frontier Airlines ULCC, +1.93% is also noticing “softening in the level of bookings over seasonal norms that we believe is directly related to the increased COVID-19 case numbers associated with the Delta variant,” the company said in its Aug 4. quarterly earnings report. — David Mericle, chief U.S. economist at Goldman Sachs. Indeed, several economists, including Federal Reserve Chairman Jerome Powell, have said that prices will remain elevated in the coming months, but will “moderate” once Americans adjust to the new normal. He too cited pent-up consumer demand and supply shortages for certain materials.