Consumer confidence declines in inflation
Inflation Indicators Tracked by the Federal Reserve increased 6.3% year-on-year in May and remained unchanged from April levels.
Thursday'sreportfrom the Ministry of Commerce shows that painfully high inflation puts financial pressure on American families and causes special harm to low-income families and people of color. Provided the latest evidence that it is exerting.
As prices rise, consumer spending declines. A government report also states that personal consumption rose at a slump of 0.2% from April to May, indicating that spending is beginning to weaken in the face of high inflation.
Monthly prices rose 0.6% from April to May and 0.2% from March to April.
Chronically high inflation has become a major threat to the economy and has become a political danger to President Joe Byden and Democrats as the midterm elections approach. Associate Press-79% of adults in the United States say their economy is poor, according to a new study from the NORC Public Affairs Research Center. Inflation is above a healthy 3.6% unemployment rate, as the focus of Americans suffering from high gasoline and food prices and rising rents.
Another report from Morning Consult, released Thursday, found that consumers must increasingly rely on savings or credits for their purchases. "The percentage of adults with credit card balances has risen by 5 percentage points compared to a year ago, as inflation has reduced purchasing power and incomes can no longer grow as they once did," Morning Consult said. Wrote.
High inflation is making consumers more and more worried about the economy. According to the Council Committee'ssurvey, consumer confidence reached its lowest point in 16 months, and American outlook is bleak due to fears of inflation, especially gas and food prices.
The federal government is catching up
In response to the highest inflation since the 1980s, the federal reserve has a series ofaggressive We have embarked on a rate hike,, which aims to slow growth by increasing borrowing. Two weeks ago, the federal government raised the key rate by three-quarters, andwas the largest increase in 25 years, suggesting a further significant rate increase in the future.
The federal government tends to monitor Thursday's inflation gauge, called the Personal Consumer Expenditure Price Index, more closely than the government's well-known Consumer Price Index. Although the components of the two indicators are different (CPIs tend to weigh the costs of gasoline and housing more heavily and show higher inflation), the two gauges show the same basic story.
Soaring prices are the result of an unexpectedly rapid recovery of the economy from the 2020 pandemic recession. Boosted by government stimulus, record low borrowing rates, and the savings accumulated during the pandemic while staying at home, consumers continued to be surprised at the businessfactory, Overwhelmed the harbor and cargo yard. The resulting shortage of goods and labor has caused prices to skyrocket.
The federal government took time to recognize the seriousness of the threat of inflation and rejected it primarily as a temporary result of a supply chain bottleneck. However, soaring prices have proven to be unmanageable, and central banks are now catching up with significant rate hikes that can upset the economy.
- In:
- Economy
- Joe Byden
- Gas Price
- Inflation
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