US inflation down slightly, but real income of US workers still in the red. When will the consumer crash?
Inflation in the US is falling, but not as much as it should, and this will be reflected in the Fed's next decisions. Things have been better, but not good.
The annual inflation rate in the United States slowed to 8.3% in April from a 41-year high of 8.5% in March, but lower than the market forecast of 8.1%. Energy prices increased by 30.3%, less than 32% in March, i.e. gasoline (43.6% versus 48%) while fuel oil had a greater increase (80.5% versus 70.1%). On the other hand, food prices increased by 9.4%, the highest since April 1981 and also the prices of shelters (5.1% against 5%) and new vehicles (13.2% against 12%). , 5%). On a monthly basis, consumer prices rose 0.3%, slightly above expectations of 0.2% but below a 16-year high of 1.2% in March. The gasoline index fell by 6.1%, offsetting the increases in the natural gas (3.1%) and electricity (0.7%) indices. Despite the slowdown in April, which suggests that inflation has likely peaked, it is unlikely to drop to pre-pandemic levels anytime soon and will remain above the Fed's 2% target for long.
source: tradingeconomics.com
Here we can tangibly see the various components that moved US inflation, where we see that the energy this sprint had a non-expansive function
However, such high inflation was not accompanied by adequate income growth. We are in the thirteenth following month in which real incomes, net of inflation, have fallen:
Thirteen months of decline in real incomes is a long time. It is a 13-month decline in the purchasing power of US citizens. We've recently seen consumer credit skyrocket , a sign that consumers are surviving on these kinds of gimmicks, but these kinds of gimmicks can't last long. Retail sales will soon drop, also due to the increase in interest rates, and we will find ourselves facing a dry crisis of oversupply of consumer goods. Basically a High Tech version from 1929.
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Article US inflation down slightly, but real income of US workers still in the red. When will the consumer crash? comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/inflazione-usa-in-leggero-calo-ma-redditi-reali-dei-lavoratori-usa-ancora-in-rosso-a-quando-il-crack-dei-consumi/ on Wed, 11 May 2022 14:59:15 +0000.