Consumer spending stagnates and inflation strengthens.
This is life in the United States economy?
According to the Bureau of Economic Analysis (BEA), personal spending was flat at zero percent in May, falling short of the market forecast of 0.4 percent. This is down from the 0.9 percent gain in April.
It is clear that consumers exhausted their stimulus checks from Uncle Sam.
Personal income slumped two percent in May, which was better than the expectation of -2.5 percent.
The Personal consumption expenditures price index, meanwhile, surged at an annualized rate of 3.9 percent in May, up from 3.6 percent in the previous month. On a month-over-month basis, the PCE price index rose 0.6 percent.
This is the preferred inflation measurement for the Federal Reserve.
“Even though the positive base effects will lessen in the second half of the year, sequential inflation is expected to remain strong given demand is unlikely to ease as the economy continues to reopen and as supply chains remain under pressure,” said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina, in an interview with Reuters.
What is interesting about all these articles is that nobody talks about the $4 trillion created in a single year. While their allusions to supply chains and global demand are correct, everyone is silent on the printing press.
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