United States: Income, Expenditures, Inflation

By Joseph Politano @JosephPolitano

"The CPI is currently running well ahead of its pre-COVID 2% growth trend, although it is worth acknowledging that the Personal Consumption Expenditures Price Index (which the Federal Reserve targets) has shows significantly lower readings."

"The pandemic has driven spending that would have gone to services into additional consumer and durable goods. Supply chains appear strained are operating under unprecedented order volumes. In other words, this is a crisis of abundance rather than a crisis of scarcity."

"Today, goods prices tell a different story. Car prices have stalled, with used car and truck prices growing 2.5% after shrinking in August and September. This is partly because rising prices choked demand and partly because vaccinations are enabling additional services spending."

"Fundamentally, sustained inflation cannot occur without above-trend income and spending growth. As of right now, both personal incomes and personal spending remain on-trend. As long as nominal income growth remains on-trend inflation will slide back down to normal levels."

Inflation - USA - BLS - Consumer Price Index - U.S. City Average

Labour & Income - United States - BEA - Personal Consumption Expenditures on Goods and Services

ActivityUnited StatesLabour & Income
Maia Mindel

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Maia Mindel

Macroeconomic analyst at Alphacast. Following inflation, activity, and trade.

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