{"id":54712,"date":"2023-12-13T04:59:13","date_gmt":"2023-12-13T04:59:13","guid":{"rendered":"https:\/\/prosfunds.com\/business\/inflation-is-slowly-coming-down-and-no-longer-outweighing-americans-wages\/"},"modified":"2023-12-13T04:59:14","modified_gmt":"2023-12-13T04:59:14","slug":"inflation-is-slowly-coming-down-and-no-longer-outweighing-americans-wages","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=54712","title":{"rendered":"Inflation\u00a0is slowly coming down and no longer outweighing Americans\u2019 wages"},"content":{"rendered":"
\n

\n Sometimes boring and predictable can be good things.\n <\/p>\n

\n The latest Consumer Price Index report wasn\u2019t flashy by any means: The inflation gauge that measures price changes for a basket of goods and services ticked down slightly to 3.1% for the 12 months that ended in November, according to Bureau of Labor Statistics data released Tuesday.\n <\/p>\n

\n Stripping out the more volatile components of food and energy, the core index held pat at a 4% year-over-year growth rate, staying at its lowest level since September 2021.\n <\/p>\n

\n The latest CPI report largely came in exactly as economists had expected and served up another piece of evidence that high inflation is (very) slowly, but surely, abating.\n <\/p>\n

\n That\u2019s welcome news for the Federal Reserve and for Americans, who are finally starting to not have their earnings completely eaten away by rising prices.\n <\/p>\n

\n Real average hourly earnings increased an estimated 0.8% annual rate in November, the eighth consecutive month of growth after 24 months in negative territory, according to separate data released Tuesday by the BLS.\n <\/p>\n

\n However, inflation remains above what the Fed would like to see; and steady, but still growing, prices continue to put pressure on consumers, said Tyler Schipper, economics and data analytics professor at the University of St. Thomas in St. Paul, Minnesota.\n <\/p>\n

\n \u201cI think there\u2019s starting to be this trickle of good-enough economic news with some real benefits to consumers that, over time, starts to show up,\u201d Schipper told CNN in an interview. \u201cBut if you went polling down the street right now, we\u2019re not there yet.\u201d\n <\/p>\n

\n On a monthly basis, the gauge that measures price changes for a basket of goods and services ticked up 0.1% from October. Core CPI rose 0.3% from October, matching the prior month\u2019s growth rate.\n <\/p>\n

\n Shelter prices rose for the second consecutive month, helping to offset the fall in gas prices, which sank 5.8% from October. Food prices moderated slightly from the month before.\n <\/p>\n

\n Economists were expecting prices to stay flat over the month and for the annual rate to ease to 3.1%, according to Refinitiv. They expected core to stay unchanged at 4%.\n <\/p>\n

\n Core goods prices declined, but helping to prop up core inflation was the rise in shelter costs as well as used cars, which were up 1.6% from October.\n <\/p>\n

\n The used car price spike should reverse in the coming months, economists said.\n <\/p>\n

\n Wholesale used car prices temporarily rose in August and September amid concerns over the United Auto Workers strike; however, those wholesale prices then retreated in October and November, Bank of America economists wrote in notes issued this week.\n <\/p>\n

\n The shelter index, which is a measure of rents and the implicit rental value of owner-occupied properties, continues to be a concern, said Phil Powell, executive director of the Indiana Business Research Center and clinical associate professor of business economics and public policy at Indiana University.\n <\/p>\n

\n \u201cThere is a very large shortage of affordable homes or even rentals,\u201d Powell told CNN. \u201cThe rate of new household formation is double the rate of population growth; we haven\u2019t seen anything like this in a long time. Because of the structural misalignment between supply and demand, we will continue to see housing prices and shelter increase long term.\u201d\n <\/p>\n

\n On Tuesday, President Joe Biden hailed the progress on inflation, as it\u2019s now down nearly two-thirds from its peak of 9.1% in June 2022.\n <\/p>\n

\n \u201cInflation has come down while unemployment has remained below 4% for the longest stretch in 50 years, which means that workers\u2019 wages and household wealth are higher now than they were before the pandemic, adjusted for inflation,\u201d he said in a statement. \u201cPrices have declined for a number of products over the last year from cars and gallons of gas to TVs, toys, many appliances, to eggs and milk.\u201d\n <\/p>\n

\n He added: \u201cDespite this progress, I know many Americans still find too many things unaffordable.\u201d\n <\/p>\n

\n The Federal Reserve has been on a monthslong campaign of rate hikes to bring down inflation, which soared to a 41-year high last year. The central bank will make its latest monetary policy decision on Wednesday, and is largely expected to leave its benchmark rate unchanged again.\n <\/p>\n

\n \u201cThis will not have any meaningful impact on tomorrow\u2019s likely decision to hold rates steady, but it provides the Fed some ammunition to reiterate that rate cuts as early as March 2024 remain premature,\u201d said Olu Sonola, head of US regional economics for Fitch Ratings, in commentary Tuesday morning. \u201cGoods and energy deflation continue to be the much-needed gift that keeps on giving. However, the acceleration in core services inflation across both shelter and non-shelter services is a reminder that the sustained downward path in core services inflation that the Fed wants to see is still not within reach.\u201d\n <\/p>\n

\n \ufeffSonola added: \u201cThe trend is still undoubtedly encouraging, but the fine details here will sow some doubts.\u201d\n <\/p>\n

\n Fed Chair Jerome Powell in recent months has acknowledged the progress on inflation but consistently iterated that it\u2019s far too premature to declare victory. The central bank has a target inflation rate of 2%, as measured by the core Personal Consumption Expenditures price index.\n <\/p>\n

\n \u201cThis report is very good news for the soft landing contingent,\u201d Allison Oldham Luedtke, assistant professor of economics at St. Olaf College in Northfield, Minnesota, told CNN in an interview. \u201cWe are in the smoothest of descents. We just need to be a little patient about it.\u201d\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Sometimes boring and predictable can be good things. The latest Consumer Price Index report wasn\u2019t flashy by any means: The inflation gauge that measures price changes for a basket of goods and services ticked down slightly to 3.1% for the 12 months that ended in November, according to Bureau of Labor Statistics data released Tuesday. […]<\/p>\n","protected":false},"author":1,"featured_media":54713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-54712","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nInflation\u00a0is slowly coming down and no longer outweighing Americans\u2019 wages | Prosfunds<\/title>\n<meta name=\"description\" content=\"Sometimes boring and predictable can be good things. 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