Another pebble in the garden of inflation

As mentioned above - consumer spending one of the key elements of the US economy. And today, data has been released that shows that spending fell for the second month in a row! Badly? Here it is - Recession and stuff? Well, let's look at the details.

👉"Personal income increased by $49.5 billion, or 0.2% on a monthly basis, while consumer spending fell $41.6 billion, or 0.2%, in December

👉» Increasing personal income in the first place reflected an increase in wages and incomes of owners. personal savings rate (i.e. personal savings as a percentage of disposable personal income) was 3.4% in December compared to 2.9% in November.”
Well, such a “recessionary” picture 🤷

Of the pluses for inflation growth - wage growth is displayed in rising product prices.

But in the direction of containment - the volume of savings is growing, which is logical - interest rates stimulate accumulation, not consumption.
And all that was needed was to raise the rate by 18 times from 0.25% to the current 4.5% 😂

Summary. The decrease in costs is not a consequence of the deterioration in the situation with the incomes of the population. As you can see, the opposite is true. Compared to 2020, here we have a more balanced and market-based process, which, unlike "helicopter money", makes the economy more manageable, and therefore more predictable. Stimulating savings makes it possible to create a resource base for further investments already in the medium term. How it will be in reality - we'll see.

Author: Novel in macroeconomics

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