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THIS WEEK: How strong is the economy?

We're seeing both record inflation and high employment. Is the economy OK?

BETTENDORF, Iowa — The government says inflation is rising faster than at any time since the summer of 1982.

Consumer price inflation rose 6.8% over the past 12-months.

If you take out the spikes in food and energy it's still a 4.9% increase, the largest since the summer of 1991.

That's certainly not good news.

Or is it?

"The economy structure is sound and we'll be in a much better position going forward," said Kevin Depew, the deputy chief economist for Chicago-based RSM US LLP.

"I'm very optimistic.  The structure is in place for a robust economy.  Not just for 2021, but for 2022 and 2023," he added.

You can listen to our entire interview with economist Kevin Depew on THE CITIES PODCAST.

We've gotten a better retail picture since the Black Friday, the Shop Local Saturday, and the Cyber Monday shopping sprees have come and gone.

Retail tracker Sensormatic Solutions says store foot traffic was up 48% from last year, though down 28% from 2019.

Holiday sales are expected to climb at a record pace this year, with the National Retail Federation predicting an increase of up to 10.5%.

That would put sales during November and December at more than $859 billion dollars.

"I'm optimistic that it will be a high quality holiday season when the data comes in and all is said and done," said Depew.

"It may not be the greatest one in the last five years as some have said." 

Depew says the foundations of the American economy is the strongest in years.  

Part of the reason is the challenges Americans have faced so far this decade.

Even in the midst of a COVID-19 pandemic.

"It's a tragedy that we're living through," he said.

"So I understand if there's a perception that things aren't great right now.  But what I look at is over the last 20-years we've been through 9/11, we've been through the 'Dot-com Crash', the 'Corporate Debt Bubble', we had a structural financial crisis that in terms of the structure of the economy, dwarfs the impact, in terms of the data of what has happened during the COVID and the pandemic."

And he sees statistics that show two of the biggest worries as we end 2021, inflation and supply chain backups, may resolve themselves in the coming months.

Depew sayid "we have likely seen" the worst of the supply chain crisis.

"It doesn't mean that it's going to immediately improve.  I think we're looking at a slow process.  It just takes time."

And he sees inflation slowing down, but admitted he expected prices won't drop significantly in the coming months.

"It certainly is a problem for businesses in the short term."

Watch "News 8 THIS WEEK with Jim Mertens" Sundays at 10 a.m. on WQAD News 8.