The Consumer Price Index rose 9.1 percent from a year ago,…
The Federal Reserve ‘s increasing interst rates are just wrecking the Home purchase , and mortgage refinancing…
Add to that interst rates for credit for other things…
The economic storm for America IS getting worst….
(A recession is also creeping in ?)
Gas prices ARE dropping….
Is that the only thing?
Salary increases ain’t….
Prices in June climbed 9.1 percent from a year earlier, the fastest pace since 1981, as soaring gas prices, rising rents and swelling grocery bills made everyday life more expensive for American households. The pickup in prices was broad and faster than expected, spelling trouble for the Federal Reserve.
The inflation index including food and gas could slow down in July’s data because prices at the pump have moderated in recent weeks. The national average cost of a gallon of unleaded gas peaked at about $5 last month. This week, it was around $4.65.
But gas prices are volatile and could shoot up again. The report contained unwelcome news beyond the headline number. A core inflation index that strips out food and fuel prices — giving a sense of underlying inflation trends — remains high and came in faster than economists expected. The core index climbed 5.9 percent the year through June, barely a slowdown from 6 percent in the previous report. The core measure actually climbed 0.7 percent from May to June, more than the previous monthly increase and bad news for central bankers.
The global economy has been buffeted by a series of shocks that have not ceased since the coronavirus pandemic began. Factory shutdowns and shipping shortages have roiled supply chains, worker shortages are making it harder for airlines to fly at capacity and hotels to rent out rooms, and Russia’s invasion of Ukraine has disrupted oil and gas supplies. Economists have spent more than a year struggling to predict how and when inflation will settle back down.
“We now understand better how little we understand about inflation,” Jerome H. Powell, the Fed chair, said on a recent panel in Sintra, Portugal.
The Fed, which is charged with keeping prices stable and the labor market strong, is no longer waiting for normalcy to return. Central bankers are worried that as inflation remains high and stubborn, consumers and businesses could get used to it.
If people begin to ask for higher wages in anticipation of price increases — negotiating cost-of-living adjustments of 6 or 7 percent, for example, instead of the typical 2 to 3 percent — companies could try to pass their swelling labor costs along to customers by raising prices. That could perpetuate rapid inflation, making it much trickier for the Fed to stamp out….
Bank of America economists forecast a “mild recession this year” in the Untied States, saying services spending is slowing and hot inflation is spurring consumers to pull back, Bloomberg reports.