High inflation will continue impacting consumers, businesses, and investors for the foreseeable future, according to a Wall Street Journal survey of economists.

The survey found economists, on average, expect consumer inflation of 5.25 percent in December. If inflation does remain above 5 percent through the end of 2021, it will be the longest period above that level in three decades. 

Furthermore, the forecasters see inflation remaining well above the Federal Reserve’s traditional 2 percent inflation target through the end of 2022. The central bank has stated it is willing to keep inflation above that target to sustain the economic rebound and revive employment, in the expectation that elevated inflation will be transitory.  But economists surveyed by The Journal predict the high tide of inflation will recede very gradually.   

“It’s a perfect storm: supply-chain bottlenecks, tight labor markets, ultra-easy monetary and fiscal policies,” Michael Moran, chief economist of Daiwa Capital Markets America told The Wall Street Journal.

Half of the economists surveyed pointed to supply-chain troubles as the biggest threat to economic growth in next year, while one-fifth cited labor shortages. Those challenges are slowing factory production at a time when demand for goods remains strong. The result is a jump in consumer prices.

“Consumer spending, and by extension GDP growth, is being limited by high rates of inflation eroding the real purchasing power of consumers,” said Visa economist Michael Brown.

Nearly half of the economists, 45 percent, believe it will take until the second half of 2022 for supply chain troubles to ease. 

The Wall Street Journal surveyed 67 business, academic and financial forecasters between October 8-12.