![]() Yet Americans are still desperate for cars, Buckberg said, which has allowed dealers to keep their markups much higher than pre-pandemic levels. It means the Fed will likely have to work harder to slow consumer spending through higher rates.Įlaine Buckberg, chief economist at General Motors, said Friday that the pandemic disruptions to overseas production of semiconductors, which have slowed auto output, have significantly dissipated and that overall supply chain disruptions have improved about 80% from the worst days of the pandemic. “Companies are still putting through large price increases for those goods, and that’s problematic,” she said. Furniture, sports gear and new cars became more expensive last month, suggesting that businesses are still raising prices in response to robust consumer demand. Though much of the food is donated, Crouch said her organization buys some of it and has faced sharp increases in meat and dairy prices in the past few months.Īnd the prices of many other goods are still rising even as supply chain snarls unravel, said Rosner-Warburton, the MacroPolicy economist. Mary Jane Crouch, executive director of America’s Second Harvest of Coastal Georgia, which works with a network of food banks, said 38% more food was distributed in August compared with July. Worsening food inflation is a particular strain on lower-income families, more of whom have had to turn to food banks and other aid as inflation has worsened. And egg prices surged 2.9% just in August from July and are up nearly 40% from a year ago. In the past year, they have soared 13.5% - the biggest 12-month increase since 1979.Ĭhicken prices have risen nearly 17% in the past year. But grocery prices have continued to rise rapidly, jumping 0.7% from July to August. Nationally, the average cost of a gallon of gas has dropped to $3.71, down from just above $5 in mid-June. He has instead highlighted his administration’s recent legislative accomplishments, including a law enacted last month that’s intended to reduce pharmaceutical prices and fight climate change. ![]() In his speeches, Biden has generally stopped referring to the impact of inflation on family budgets. That is welcome news for American families, with more work still to do.” In a statement Tuesday, the president said, “Overall, prices have been essentially flat in our country these last two months. It may already have contributed to slightly higher public approval ratings for Biden. Many economists generally agree, though they say that snarled supply chains, sharp pay increases and Russia’s invasion of Ukraine have also been key factors in the inflation surge.Īt the same time, the drop in gas prices - for consumers, perhaps the most visible barometer of inflation - could bolster Democrats’ prospects in the midterm elections. They blame President Joe Biden’s $1.9 trillion stimulus package passed last year for much of the increase. Republicans have sought to make inflation a central issue in the midterm congressional elections. It has deepened gloom about the economy despite strong job growth and low unemployment. Inflation is higher than many Americans have ever experienced, escalating families’ grocery bills, rents and utility costs, among other expenses. “It raises the risk of higher interest rates and a hard landing for the economy.”Ĭhair Jerome Powell is expected to announce another big increase in the Fed’s key rate next week, which will lead to higher costs for consumer and business loans. “This was a disappointing report,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives. ![]() That would make it even harder for the central bank to meet its goal of achieving a “soft landing,” whereby it would tame inflation without causing a recession. Some economists now expect the Fed to raise its benchmark short-term rate, currently in a range of 2.25% to 2.5%, to 4.5% or higher by early next year. The Dow Jones industrial average sank nearly 900įurther Fed rate hikes could weaken growth so much as to push the economy into a recession. Stock prices tumbled and bond yields rose on the worse-than-expected core figures, with many investors fearful that the Federal Reserve will turn even more aggressive in its drive to curb inflation. Rents, medical care services and new cars all grew more expensive last month. And in the year ending in August, core prices leapt 6.3%, up from 5.9% in July.Ĭore prices typically provide a clearer read on where costs are headed than overall inflation. But excluding the volatile food and energy categories, so-called core prices jumped 0.6% from July to August - up sharply from 0.3% the previous month and dashing hopes, for now, that core prices would moderate.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |