by Lucia Mutikani
Reuters.com
WASHINGTON, May 28 (Reuters) – U.S. consumer confidence unexpectedly improved in May after deteriorating for three straight months amid optimism about the labor market, but worries about inflation persisted and many households expected higher interest rates over the next year.
The mixed survey from the Conference Board on Tuesday also showed more consumers believed that the economy could slip into recession in the next 12 months. Nonetheless, consumers were very upbeat about the stock market and more planned to buy major household appliances over the next six months.
While the economy is expected to slow this year as a result of the cumulative impact of 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation, economists and most business executives are not forecasting a downturn.
On Friday’s edition of Bloomberg’s “Balance of Power,” Rep. Jonathan Jackson (D-IL) argued against cuts to SNAP benefits because “people are aching” due to inflation, but argued that’s not Joe Biden’s fault and there were supply chain issues.
Huge month-to-month jumps for second month in a row as businesses jack up their prices for new fiscal year.
Across the nation families looking for a quick option to feed the family have seen prices rise as inflation has taken a bite out of the fast-food experience.
Twice in the past few weeks President Joe Biden has claimed that when he took office in January 2021 inflation was “over nine percent.” First on CNN’s OutFront with Erin Burnett on May 8 and again on May 14 in a Yahoo! Finance interview, the bizarre comment was made. And as has become a routine with the gaffe-prone chief executive, White House staffers added shamelessness to what could have been limited to embarrassment by issuing a statement: “The President was making the point that the factors that caused inflation were in place when he took office. The pandemic caused inflation around the world by disrupting our economy and breaking our supply chains.”
The recent inflationary surge is squeezing households, but not likely in the way you think. It’s hitting the wealthy disproportionately, new research shows.
Americans are bracing for a cruel summer as consumer sentiment takes a significant hit, driven the impression that we cannot shake off persistent inflation and the view that the economy is not out of the woods.
Little by little, our standard of living has been eroding. A couple decades ago, we had the largest and most prosperous middle class in the history of the world, but now most of the country is struggling. At this point, fast food is considered to be a “luxury”, 11 million children are living in poverty, and thousands of stores are permanently shutting down all over the United States because consumers have so little discretionary income these days. We are in the midst of a historic cost of living crisis, and those at the bottom of the economic food chain are being hit the hardest.
The money supply is rising again, and persistent price inflation is not a surprise. Price inflation occurs when the amount of currency increases significantly above private sector demand. For investors, the worst decision in this environment of monetary destruction is to invest in sovereign bonds and keep cash. The government’s destruction of the purchasing power of the currency is a policy, not a coincidence.