A key measure of inflation jumps 6.3% since last year.
As if you needed another reminder that prices are going up: The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index jumped 0.6% in May, up from 0.2% in April, according to the Bureau of Economic Analysis' latest report released this morning. The PCE price index measures changes in prices for goods and services by U.S. households. The index was up 6.3% from last year, the same year-over-year rate as the month before. Excluding more volatile food and energy prices, the index rose 0.3% last month, as it did in April, and was 4.7% higher than a year ago. That's a slight decrease from April's annual figures, at 4.9%. Americans are also earning more according to today's release from the Commerce Department, as personal incomes rose 0.5%, largely due to increases in wages. However, wage gains have not kept pace with inflation for many workers.
Recession worries persist after comments from Federal Reserve Chair Jerome Powell at an ECB forum yesterday where he highlighted that there is a "risk" that the central bank goes "too far" with interest rates. While he said that he still believes the central bank can achieve a "soft landing," he said pathways to achieving it have gotten narrower. Investors, economists, business leaders, and American consumers have been worried about the tightrope that the Federal Reserve must walk: being aggressive in fighting inflation without tipping the U.S. economy into a recession.
- Kristin |
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16 - That's how many state governments have sent out, approved, or are considering payments to residents to help them cope with the rapidly rising cost of living. |
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Real GDP declined by 1.6% in the first quarter of 2022, a slightly steeper drop than previously reported.
The U.S. economy has been struggling more than we thought. The annual growth rate of real gross domestic product (GDP) in the first quarter of 2022 was revised to a decline of 1.6% from the previously reported decline of 1.5%, according to the Bureau of Economic Analysis. Real GDP is the total value of goods and services produced in the U.S., adjusting for the impact of inflation and helps indicate the size and growth of the economy. This drop follows an increase in GDP of 6.9% in the fourth quarter of 2021, and means that the economy actually shrank more than expected. The slightly steeper decline comes as the Federal Reserve raises interest rates to combat surging inflation, adding to worries that the U.S. economy could fall into a recession. If alarm bells are going off in your head, don't panic just yet: It's not 100% certain that the U.S. will indeed go through another recession. And even if it does, when will it happen? How long will it last? Economists and business leaders believe the U.S. economy will likely experience a recession by the end of 2022 or early in 2023. I know a recession sounds scary, but there are ways to prepare yourself financially in case of an economic downturn. If you haven't already done so, this would be a good time to increase emergency savings and pay off debt. And if you're worried about your job security, you might want to avoid making large purchases. - Kristin |
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Expectations for the future of business conditions, employment, and family income over the next six months fell in June to their lowest point since 2013, according to the latest index of consumer confidence from The Conference Board. |
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63% - That's how many workers in a survey said they were building a large enough retirement fund, a decline from last year, as people continue to deal with pandemic setbacks to their savings. |
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