|
Yesterday, a trio of indicators showed that the US economy is waking up from its pandemic slumber with the adrenaline of someone who chased a Red Bull with a 5-hour Energy.
1. Consumer prices: They
jumped 0.6% from April to May and 5% from last year, the fastest annual
increase since 2008. Driving the price increases were…
- Airfare, food, and beef
- Household furnishings, boosted by a record price increase for floor coverings
- But mostly used vehicles, which accounted for a third of May's total price hikes
2. Labor: Jobless claims, which track the number of Americans filing for unemployment benefits, dropped for the sixth straight week to 376,000. That's the lowest number since last March, when most businesses were forced to close and unemployment spiked.
3. Wealth: US household wealth climbed to a record $136.9 trillion
in Q1 thanks to rising values of stocks and homes. For perspective,
that's a 3.8% increase from the previous quarter and almost double
Americans' wealth from 10 years ago.
Could the economy use some A/C?
Headlines
blaring that inflation is rising at its fastest pace in decades have set
off alarm bells for consumers and some prominent economists, who warn
that trillions of dollars in stimulus measures + ravenous shoppers = a
recipe for runaway prices.
Many experts, however, think consumer prices have hit a peak. A few reasons why:
-
This inflation reading compares May 2021 to May 2020, when prices
were in the dumps during the onset of the pandemic. When you compare
prices to 2019, they rose just 2.5% in May.
- Prices
are rising the most in the sectors that got hit the worst by the
pandemic (transportation, hospitality, apparel). They should eventually
stabilize.
Bottom line: The economy appears to be firing on all cylinders but one: a serious worker shortage that's led to the largest number of job openings on record.
|
No comments:
Post a Comment