Petrol is suddenly cheaper. That could help Biden.

And even as Americans are under the pressure of high food bills and rising rents, consumer spending is slowing but still strong – raising hopes that inflation may ease without leading to a full-blown recession.

“We’re turning the corner on inflation,” said Mark Zandi, chief economist at Moody’s Analytics, in an interview ahead of the data’s release.

The new report is a welcome development for a White House that has celebrated recent legislative wins — including a bill to boost domestic semiconductor manufacturing and the Senate’s passage of a deficit-reduction package with funds for climate and health initiatives — that Democrats say are helping doing this will fight inflation. It could also mitigate Republican attacks that the government — and the Fed — grossly miscalculated cost-of-living increases.

New survey data released by the New York Fed on Monday showed consumers are dampening expectations that runaway prices will continue to eat away at their paychecks over the next three years. These expectations play a key role in central bank decisions on how much to raise interest rates. Americans now expect gas prices to rise 1.5 percent — compared with 5.7 percent a month ago and 6.7 percent for groceries, down 2.5 percentage points.

While these numbers represent clear improvements, it will be a long time before President Joe Biden and Democrats reverse the narrative that rising prices have overshadowed most of the economy’s post-pandemic gains.

“Even if it goes down a little bit, it’s still going to get bad,” Florida Sen. Rick Scott, who is leading efforts to bring the Senate under Republican control, said in an interview before publication. He called for cuts in government spending, arguing that the package passed by the Senate will not cut it.

“When they raise taxes, they never get the tax revenue they expect and they always spend more than they expect,” he said.

For now, Americans have not cut back on spending, even as prices continue to rise. As consumer confidence wanes, MasterCard reported spending last month rose more than 11 percent year over year — a trend that the credit card company said was driven by both demand and rising prices.

Amazon likely had a hand, too.

In reports released this week, both the BofA Institute and Adobe pointed to Prime Day — the e-commerce giant’s massive company-wide sale — as a contributing factor to July’s spending. The discounts offered on Amazon during sales can “really impact where we understand the consumer; in a very price-sensitive state,” said Adobe Digital Insights Lead Analyst Vivek Pandya.

However, lower online prices are providing respite for consumers plagued by rising costs.

Of course, economists have in the past prematurely declared that inflation has “peaked,” and several other indicators, including an explosive labor market, rising labor costs and rising household rents, suggest upward pressure on prices could persist for some time . That means that even if the Fed avoids a deep recession, it may have to keep rates high longer than many investors expect.

“Despite the likely peak in inflation, we still have a lot more heavy burdens ahead of us,” said Joseph Brusuelas, chief economist at RSM US. “We are not in a multi-month process. We are in a multi-year process.”

Meanwhile, multiple data points offer a confused picture at best of where the economy is headed. The CPI “headline” includes food and energy – commodities whose prices are much more volatile, driven by trading on exchanges rather than by companies. But the Fed is also looking at measures outside of these prices to better gauge what it calls core inflation.

Any measure of price jumps points to high inflation, so Fed Chair Jerome Powell says the distinction is less important right now. In July, core inflation rose 0.3 percent – still respectable but below economists’ expectations.

But Powell said the central bank is looking for several reports showing a significant slowdown in inflation before it begins easing its rate hikes.

One of the most annoying drivers of inflation was rents, which rose by 0.6 percent in July alone. Many expect housing costs to continue to rise sharply, even as higher mortgage rates slow house price increases.

Andrew Patterson, senior international economist at Vanguard, said he expects inflation to top 3 percent by the end of 2023 because of housing costs — well above the Fed’s 2 percent target.

“When you get into the second half of next year and rents are persistently high? That will worry them,” he said.

Zandi, whose work has been widely cited by the White House, said he expects rent rates to keep the Fed from hitting its target before 2024.

Strong labor markets will also play a role. The unemployment rate is 3.5 percent and while job vacancies have fallen, they are still higher over the past month than at any point in the decade before the Covid-19 pandemic, according to Labor Department data. And wage increases have continued to accelerate, which could increase costs for employers even if workers’ incomes fail to keep pace with overall price increases.

Bank of America Institute economist Anna Zhou said the strong labor market has helped shore up bank balances at all income levels, allowing households to offset some of the pressure from rising prices — particularly on rents.

“Around 34 percent of US households are renters,” Zhou said. “Rising rental rates are definitely squeezing their wallets.”

This bottleneck will feel even tighter as gas prices start to rise again and food inflation continues.

Administration officials are quick to cite any data point that supports their thesis that cutting inflation was Biden’s “top priority,” a White House official said Tuesday. Lower gas prices, the Anti-Inflation Act – which is unlikely to have an immediate impact on prices – and the new CHIPS and Science Act are all part of this news effort.

None of this will be enough to calm inflation hawks, including former Treasury Secretary Larry Summers, who has warned the economy is ill-prepared for a soft landing due to slow inflation inflation ahead of recent rate hikes.

“There will be disinflation from gas and other commodity prices,” Summers tweeted late Monday night. “That doesn’t mean that inflation is coming under control.”

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