![]() ![]() CNN Sans ™ & © 2016 Cable News Network.With gas prices averaging near $5 a gallon and inflation holding steady at 8 percent, the Federal Reserve raised its benchmark interest rate by 0.75 percent last week in an aggressive bid to reduce consumer demand and bring inflation back down to 2 percent. Market holidays and trading hours provided by Copp Clark Limited. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account But just removing its foot from the brake would be a positive. The fear is that the Fed will eventually overdo it, raising rates so high and keeping them there for so long that it causes a recession - if the Fed hasn’t already done that.īut Fed officials have signaled they could be ready to pause their inflation-fighting campaign late in the winter or early in the spring.įederal Reserve Chairman Jerome Powell has made it clear the Fed isn’t anywhere near ready to hit the gas on the economy by cutting rates. The spike in borrowing costs has already set off a deep slump in the housing market, the most interest rate-sensitive part of the economy. The central bank is effectively slamming the brakes on the economy. The Fed’s war on inflation is the reason the risk of a recession is significant. Real wages have been growing faster than consumer prices, a significant shift that could give consumers firepower to keep spending next year. That means adjusted for inflation, paychecks have been shrinking.īut that trend has begun to reverse, at least when measured on a monthly basis. Gas prices are expected to climb again this spring and summer but, for now at least, experts are not forecasting a return to $5 a gallon.įor much of the past year, wages have been hot but inflation has been hotter. The national average for regular gasoline recently dropped to $3.10 a gallon, an 18-month low, though it has crept higher in recent days to about $3.22 a gallon. ![]() 1 headache for consumers for much of this year has eased considerably.Īfter spiking above $5 a gallon for the first time ever in June, gas prices have plunged. But if inflation remains well above the Federal Reserve’s 2% target, that would be problematic. If this trend continues, it could significantly lower the risk of a recession. It’s also the lowest annual inflation rate in nearly a year. But this marked the fifth-straight month of improvement and a significant cooldown from 9.1% in June. At almost any other point in the past 40 years, that would be alarmingly high. The cost of living is still way too high, but the rate of inflation appears to have peaked.Ĭonsumer prices soared by 7.1% year-over-year in November. ![]() “Without mass layoffs, it’s unlikely consumers will stop spending and the economy suffer a downturn.” “This is one reason to the be optimistic the economy could skirt a recession,” Moody’s Analytics chief economist Mark Zandi told CNN on Thursday. That’s still low historically and almost exactly where jobless claims were a year ago, long before recession fears emerged. And new numbers published last week show first-time applications for unemployment benefits edged up to 225,000. Although major tech and media companies including Amazon, Twitter and Meta have laid off thousands of workers, initial jobless claims remain low. This is just a touch above the half-century low that was tied earlier this year. ![]() Has your boss recently given you a nice raise so you'll stay? Are you an employer paying workers more not to quit? ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |