PHOENIX — Experts expect the U.S. to hit a recession next year as businesses in Arizona and the rest of the nation continue to feel the impacts of inflation and supply chain constraints on the economy.
Economist Andrew Busch said that the war in Ukraine and the COVID-19 pandemic, among other global events, have been some of the largest drivers of inflation and supply chain issues. Due to COVID-19 restrictions, consumers spent a lot less on services and increased spending on goods such as appliances, he said.
"Just that 5% bump in spending on goods — we can't handle that as an economy," Busch said at the Phoenix Business Journal's Salt River Project 2023 Economic Forecast panel on Thursday. "Our supply chains were so strung out over the entire planet, it just couldn't happen."
Congress, Busch said, also allocated about $14 trillion to move the economy forward during the pandemic, which experts say has contributed to the exponential inflation seen across the U.S. in addition to supply chain challenges. As of August this year, the consumer price index had increased by 8.3% since August 2021 for items including food and energy, according to the Bureau of Labor Statistics.
