New Data Shows US Inflation Reaches 30-Year High – Analyst Says Rising Inflation May Reach ‘Tipping Point’ – Bitcoin Economics News – News Couple

New Data Shows US Inflation Reaches 30-Year High – Analyst Says Rising Inflation May Reach ‘Tipping Point’ – Bitcoin Economics News

Inflation remains hot in the US as supply constraints remain and oil prices rise, with barrels of crude oil rising above $80 per unit. Meanwhile, data released on Friday shows consumer spending rose to 4.4%, the highest inflation the country has seen in 30 years.

Inflation continues to rise in the United States

Americans are dealing with higher levels of inflation these days as new data indicates that personal consumption expenditures rose in September to 4.4%. Reuters reports that rising inflation is “continuing the tide of inflation at levels not seen in 30 years”. The loss of Americans’ purchasing power has been attributed to supply chain shortages, high oil prices, and ongoing Covid-19 measures imposed by the Biden administration.

Reuters correspondent Howard Schneider explains that rising inflation levels in the US could undermine Federal Reserve Chair Jerome Powell’s claims that inflation will be “temporary”. However, Nancy Lazar, an economist at Cornerstone Macro, believes Powell’s interim claims will be true. “We think deflation is the word” for next year, Lazar said. The economist added:

The debate over inflation will turn to wages very, very quickly.

A University of Michigan analyst says there could be a ‘tipping point’ where consumer incomes can no longer keep pace with soaring inflation.

Meanwhile, Ian Shepherdson of Pantheon Macroeconomics says wage growth may not rise as fast as inflation. During the fourth quarter, “it should be clear,” Shepherdson emphasized in a recent interview and added, “We think it’s quite reasonable to expect wage growth to slow as the labor supply recovers.”

In addition, the University of Michigan said Friday that its survey of consumer confidence fell from 72.8 points to 71.7 points. Inflation expectations for next year are at their highest levels in the United States since 2008, according to the survey’s chief economist Richard Curtin. “This was the first significant rise in inflation uncertainty on record outside of a recession,” Curtin told Yahoo Finance. For now, Curtin says consumers can tolerate inflation, but over time Americans may become less impatient.

Curtin concluded during his interview that “these reactions promote an accelerating rate of inflation until a tipping point is reached when consumers’ incomes cannot keep pace with rising inflation.”

What do you think about rising inflation in the US? Do you think inflation will be temporary or not? Tell us what you think about it in the comments section below.

Tags in this story

Biden administration, supply chain linkage, central bank, consumer debt, consumers, economy, empty shelves, Fed, food inflation, gas inflation, gas prices, government spending, Howard Schneider, inflation, inflation crisis, Jerome Powell, Nancy Lazar, new Federal Reserve Bank of York, Purchasing Power, Richard Curtin, Supply Chains, Federal Survey, Provisional, University of Michigan

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