9/20/2023 0 Comments About inflation here are optimism![]() Moreover, an expected annual income gain of 5.3% was expected by those under 45, which was the highest expected wage gain since May 1990. Consumers were more likely to anticipate additional small declines in the national unemployment rate despite its current low of 3.6%.Īnticipated wage gains remained strong, with expected gains across all households averaging 2.6%-the last time a larger increase was recorded was in March 2007. The cost of that renewed strength may be an accelerating wage-price spiral.” Strong labor market and rising wagesĬontinuing strength in the labor market and rising wages remain the sole source of economic optimism. The probability of reaching a tipping point will depend on maintaining a strong labor market and robust wage gains. “A soft landing will be difficult to achieve given the heightened uncertainties, raising prospects for a halt or a temporary reversal by the Fed. Monetary policy aims at tempering the strong labor market and trimming wage gains are the only factors that support optimism. “Fiscal actions will increasingly be hampered by partisanship in the runup to the Congressional elections. ![]() Just when supportive government policies are needed, consumers have lost confidence in economic policies,” he said. “The pandemic created a sense of uncertainty, which has only increased due to rising inflation and the growing consequences of the war in Ukraine. Consumers, however, continued to modestly advance their spending by 2.7% due to a strong labor market and rising wages. The overall impact on sentiment trends, however, was quite small: Other than the last two months, the Sentiment Index in April was still lower than in any prior month in the past decade.Ĭurtin said the 1st quarter decline in overall GDP came as no surprise to consumers. The declines in gas prices may be reversed by ongoing developments in Ukraine, he said. The cause was a sharp drop in gas price expectations, falling to just 0.4 cents from last month’s 49.6. Most of the surge was concentrated in expectations, with gains of 21.6% in the year-ahead outlook for the economy and an 18.3% jump in personal financial expectations, said U-M economist Richard Curtin, director of the surveys. Consumers voiced much more positive views in April, rising 9.8% above March, according to the University of Michigan Surveys of Consumers.
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