The president of BlackRock investment firm has said that an ‘entitled generation’ of Americans will face the shock of goods shortages for the first time in their lives as supply chain disruptions continue to spur high inflation.
‘For the first time, this generation is going to go into a store and not be able to get what they want,’ BlackRock co-founder Rob Kapito said at an energy conference in Austin, Texas on Tuesday, according to Bloomberg.
‘And we have a very entitled generation that has never had to sacrifice,’ added the 65-year-old Kapito, who has an estimated net worth of more than $400 million and made $24.6 million in total compensation in 2020.
‘I would put on your seat belts because this is something that we haven’t seen,’ said Kapito, who blamed a shortage of workers, energy and agricultural supplies for soaring ‘scarcity inflation’.
BlackRock co-founder Rob Kapito said on Tuesday that ‘we have a very entitled generation that has never had to sacrifice’ who will be shocked by coming shortages
It was not clear from his remarks which generation of Americans Kapito considered to be ‘entitled’, and a BlackRock spokesperson did not immediately respond to an inquiry from DailyMail.com on Wednesday.
Meanwhile, economists with Bloomberg are warning that the average American should budget an extra $5,200 this year for higher prices – or an extra $433 every month.
Economists Andrew Husby and Anna Wong write that households can expect to pay thousands more in 2022 for the same basket of goods and services they used last year.
‘The excess savings built up over the pandemic, and increases in wages, will cushion those costs, and allow spending to expand at a decent pace this year,’ they wrote.
‘But accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth.’
The economists estimate that higher food and energy costs will account for about $2,200 of the extra $5,200 that households can expect to pay this year.
Economists with Bloomberg are warning that the average American should budget an extra $5,200 this year for higher prices, or $433 every month
Nationwide, gas prices have stabilized but remain near the all-time highs set earlier this month.
On Wednesday, the national average price of gas stood at $4.24 per gallon, down from the record $4.33 set on March 11.
Data released earlier this month showed the consumer price index rose 7.9 in February from a year ago, the biggest increase in 40 years.
Inflation is likely to spike even higher in March, as the impact of soaring fuel prices is taken into account.
The latest data showed the price of basic necessities rising sharply, with groceries up 8.6 percent from a year ago, shelter rising 4.7 percent, clothing up 6.6 percent, and energy up 25.6 percent.
Nationwide, gas prices have stabilized but remain near the all-time highs set earlier this month
A person skates past a gas station advertising gas prices last week in Los Angeles, which became the first major US city to hit an average gasoline price of $6 or more
Most of the inflationary impacts of Russia’s invasion of Ukraine were not captured in the consumer price index for February, which does not reflect the fallout from oil and commodities prices that soared in early March.
Still, President Joe Biden blamed the latest inflation data on Russian leader Vladimir Putin.
‘A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions,’ said Biden.
‘As I have said from the start, there will be costs at home as we impose crippling sanctions in response to Putin’s unprovoked war, but Americans can know this: the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing,’ he added.
For most Americans, inflation is running far ahead of pay raises received in the last year, making it harder for them to afford necessities like food, gas and rent.
As a consequence, inflation has become a top political threat to Biden and congressional Democrats as the crucial midterm elections draw closer.
Small business owners now say in surveys that it’s their primary economic concern, too.
Inflation in the United States reached a new 40-year high of 7.9% in February
US economic growth is likely to slow sharply this year, particularly in the first three months 2022, after the government reported Wednesday that GDP grew at a healthy revised annual pace of 6.9 percent in the final quarter of last year.
Higher inflation will likely weigh on consumer spending as Americans take a dimmer view of the economy.
Home sales have fallen as the Federal Reserve has started pushing up borrowing costs, leading to a sharp increase in mortgage rates.
Exports may weaken as overseas economies are disrupted by Russia’s invasion of Ukraine.
For the January-March quarter of this year, the biggest drag will be a sharp reduction in the amount of goods businesses restock on their shelves and warehouses.
Economists forecast that growth could fall to as low as 0.5 percent in the first three months of the year and may even slip into negative territory, marking a recession.