Inflation (Economics)

More stories

  • 113 Shares169 Views

    in Economy

    GDP Report Shows US Economy Grew at 2.8% Rate

    by

    In a key economic report released just days before the presidential election, gross economic product rose at a 2.8 percent rate in the third quarter.Consumers are spending. Inflation is cooling. And the U.S. economy looks as strong as ever.Gross domestic product, adjusted for inflation, expanded at a 2.8 percent annual rate in the third quarter, the Commerce Department said on Wednesday. That came close to the 3 percent growth rate in the second quarter and was the latest indication that the surprisingly resilient recovery from the pandemic recession remained on solid footing.“The economy right now is firing on nearly all cylinders,” said Joe Brusuelas, chief economist at the accounting and consulting firm RSM.The report was the first of three crucial indicators on the nation’s economy scheduled for release this week, just days before the presidential election and the next policymaking meeting of the Federal Reserve.The strength in the third quarter was again driven by robust consumer spending, which grew at a 3.7 percent rate, adjusted for inflation. Rising wages and low unemployment meant that Americans continued to earn more, while inflation continued to ease: Consumer prices rose at a 1.5 percent annual rate in the third quarter and were up 2.3 percent from a year earlier.As recently as a few weeks ago, many economists were concerned that spending was about to slow as the job market weakened and household savings dwindled. But revised data released last month showed that incomes and savings were stronger than initially reported, and recent data on the job market has been strong. That suggests that spending could continue to grow — especially because data released by the Conference Board this week showed that consumers were at last feeling more confident in the economy.“Most consumers continue to be working,” said Dana Peterson, chief economist for the Conference Board. “If you’re a consumer and you’re working, then you’re going to spend.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 113 Shares149 Views

    in Economy

    U.S. Economy Grew at 2.8% Rate in Third Quarter

    by

    In a key economic report released just days before the presidential election, growth was again driven by robust consumer spending.Consumers are spending. Inflation is cooling. And the U.S. economy looks as strong as ever.Gross domestic product, adjusted for inflation, expanded at a 2.8 percent annual rate in the third quarter, the Commerce Department said on Wednesday. That came close to the 3 percent growth rate in the second quarter and was the latest indication that the surprisingly resilient recovery from the pandemic recession remained on solid footing.“The economy right now is firing on nearly all cylinders,” said Joe Brusuelas, chief economist at the accounting and consulting firm RSM.The report was the first of three crucial indicators on the nation’s economy scheduled for release this week, just days before the presidential election and the next policymaking meeting of the Federal Reserve.The strength in the third quarter was again driven by robust consumer spending, which grew at a 3.7 percent rate, adjusted for inflation. Rising wages and low unemployment meant that Americans continued to earn more, while inflation continued to ease: Consumer prices rose at a 1.5 percent annual rate in the third quarter and were up 2.3 percent from a year earlier.As recently as a few weeks ago, many economists were concerned that spending was about to slow as the job market weakened and household savings dwindled. But revised data released last month showed that incomes and savings were stronger than initially reported, and recent data on the job market has been strong. That suggests that spending could continue to grow — especially because data released by the Conference Board this week showed that consumers were at last feeling more confident in the economy.“Most consumers continue to be working,” said Dana Peterson, chief economist for the Conference Board. “If you’re a consumer and you’re working, then you’re going to spend.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 113 Shares149 Views

    in Economy

    Have Paychecks Kept Up With the Cost of Living?

    by

    On average, pay has risen faster than prices in recent years. But the overall picture is complicated — and it’s not just facts versus “vibes.”Have Americans’ paychecks kept up with the cost of living over the past several years?It is a surprisingly difficult question to answer.According to most Americans, the answer is a clear “no.” In polls and interviews ahead of the presidential election, people of virtually all ideologies and income levels say inflation has made it harder to make ends meet, eclipsing whatever raises they have managed to win from their employers.According to economic data, the answer appears, at least on the surface, to be “yes.” Income and earnings have outpaced inflation since the start of the pandemic, according to a variety of both government and private-sector sources. That is especially true for the lowest earners — a partial reversal of the rising inequality of recent decades.But this is not a simple case of facts versus “vibes.” Economic statistics are based on broad averages. Dig deeper, and the story becomes more complicated. How a given family or individual has fared over the past five years depends on a litany of factors: whether the earners own their home or rent; whether they had to buy a car or send a child to day care; whether they were able to change jobs or demand a raise.“I feel like some people are being very dismissive, saying, ‘Oh, people are wrong — there has been all this real wage growth,’ but that is a simple average,” said Stefanie Stantcheva, a Harvard economist who has studied how people experience inflation. “It’s actually very, very hard to say people are wrong — I would almost never say that.”The bottom line: Most American workers are probably making more money today, adjusted for inflation, than they were in 2019. But not all have seen their pay keep up with their own cost of living, and many — perhaps most — are lagging behind where they would be if prepandemic trends had continued unabated. Those complications may help explain why so many Americans believe they have fallen behind.

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Change since end of 2019 in various earnings measures
    Notes: After-tax income is per capita and excludes government transfer payments and is adjusted for inflation by the Personal Consumption Expenditures Price Index. Hourly earnings are for production and nonsupervisory workers and are adjusted for inflation by the CPI-W. Median weekly earnings are for full-time workers and are adjusted for inflation using the CPI-U. Average weekly earnings are for all workers and are also adjusted using the CPI-U. All series are monthly except for median weekly earnings, which are quarterly.Sources: Bureau of Labor Statistics, Bureau of Economic Analysis, Federal Reserve Bank of New YorkBy The New York Times

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Change in inflation-adjusted weekly earnings by wage level, 2019-2024
    Note: Change is measured in the third quarter of each year, not seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York Times

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Median weekly earnings vs. prepandemic trend
    Notes: Earnings are shown in 2023 dollars and are for full-time workers. Data is seasonally adjusted. Trend line is based on 2014 to 2019 data.Source: Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 138 Shares139 Views

    in Economy

    Russia Raises Interest Rate to 21 Percent, Its Highest in Decades

    by

    Military spending and recruitment are causing the country’s economy to overheat, leaving regulators in a struggle to rein in rising prices.Russia’s central bank raised the cost of borrowing in the country to its highest level in more than two decades on Friday in an effort to slow inflation that is being fueled by record military spending and recruitment.The central bank raised Russia’s benchmark interest rate to 21 percent during its regular monetary policy meeting. That makes borrowing in the country even more expensive than at the start of Russia’s invasion of Ukraine in February 2022, when the central bank sharply increased interest rates to calm the economy. The effective cost of borrowing in Russia is now the highest since 2003.It was the third increase in a row, and Elvira Nabiullina, the central bank’s president, said that interest rates could rise further later this year.“We don’t see inflationary pressures slowing down,” Ms. Nabiullina, who maintains some policy independence from the Kremlin, told reporters after announcing the new rate.The increase underscores the challenges that Ms. Nabiullina faces as she tries to cool inflation, which she forecasts will average 8.8 percent this year. At that level, prices are rising more than twice as quickly as the central bank considers healthy for the Russian economy.Ms. Nabiullina implicitly blamed Russia’s war in Ukraine for the continued price increases. She said the Kremlin’s decision to raise spending by $15.5 billion next year, mostly to cover war-related costs, was overheating the economy and feeding inflation.In particular, she said, high government spending blunts the central bank’s main tool for controlling inflation — setting interest rates. This is because companies that receive military contracts are willing to take out loans at any cost to meet production deadlines.Labor shortages resulting from military recruitment during the war have also fueled inflation.The war has left hundreds of thousands of Russian men dead or seriously injured, according to Western intelligence agencies. Hundreds of thousands more have left the country to avoid being called up. And hundreds of thousands of others have joined the army to benefit from ever-rising payouts, leaving the civilian economy deprived of workers.“Spare hands no longer exist in the economy,” Ms. Nabiullina said, which leaves companies competing for workers by offering them higher wages.In turn, those rising wages spur consumer spending, further contributing to inflation.Military spending has caused a boom in the Russian economy: The International Monetary Fund said this week that Russia’s economy would grow 3.6 percent this year, 0.4 percentage points higher than its previous forecast. But economists say that the situation is breaking the balance between supply and demand, with potential long-term consequences for the country’s financial stability.Yet the Kremlin is showing no signs of letting up on war spending.“Our main priority are the goals of the special military operation,” Finance Minister Anton Siluanov told RBC, a business newspaper, this week, referring to the war in Ukraine. “We will spend as much money as we need on the battlefield, on the victory.”Oleg Matsnev More

  • 150 Shares199 Views

    in Economy

    I.M.F. Says Inflation Fight Is Largely Over but Warns of New Threats

    by

    The International Monetary Fund said protectionism and new trade wars could weigh on growth.The global economy has managed to avoid falling into a recession even though the world’s central banks have raised interest rates to their highest levels in years to try to tame rapid inflation, the International Monetary Fund said on Tuesday.But the I.M.F., in a new report, also cautioned that escalating violence in the Middle East and the prospect of a new round of trade wars stemming from political developments in the United States remain significant threats.New economic forecasts released by the fund on Tuesday showed that the global fight against soaring prices has largely been won: Global output is expected to hold steady at 3.2 percent this year and next. Fears of a widespread post-pandemic contraction have been averted, but the fund warned that many countries still face a challenging mix of high debt and sluggish growth.The report was released as finance ministers and central bank governors from around the world convened in Washington for the annual meetings of the I.M.F. and the World Bank. The gathering is taking place two weeks ahead of a presidential election in the United States that could result in a major shift toward protectionism and tariffs if former President Donald J. Trump is elected.Mr. Trump has threatened to impose across-the-board tariffs of as much as 50 percent, most likely setting off retaliation and trade wars. Economists think that could fuel price increases and slow growth, possibly leading to a recession.“Fear of a Trump presidency will loudly reverberate behind the scenes,” said Mark Sobel, a former Treasury official who is now the U.S. chairman of the Official Monetary and Financial Institutions Forum. Mr. Sobel said global policymakers would probably be wondering what another Trump presidency would “mean for the future of multilateralism, international cooperation, U.S.-China stresses and their worldwide ripples, and global trade and finance, among others.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares139 Views

    in Economy

    The Best Books About the Economy to Read Before the 2024 Election

    by

    Voters are forever worried about the economy — the price of homes and groceries, the rise and fall of the stock market, and, of course, taxes — but the economic policies that affect these things often seem unapproachable. Donald Trump wants to cut taxes and raise tariffs. Kamala Harris wants to raise taxes on high-income households and expand the social safety net. But what does that mean? And what are they hoping to achieve?Part of what makes economic policy difficult is the need to understand not just the direct impact of a change but also its many indirect effects. A tax credit to buy houses, for example, might end up benefiting home sellers more than home purchasers if a surge in demand drives up prices.The mathematics and jargon that economists use in journals facilitate precise scientific communication, which has the indirect effect of excluding everyone else. Meanwhile, the “economists” you see on TV or hear on the radio are more often telling you (usually incorrectly) whether the economy will go into recession without explaining why.But some authors do a good job of walking the line between accessibility and expertise. Here are five books to help you crack the nut on the economy before Election Day.The Little Book of EconomicsBy Greg IpThe best way to understand things like the causes of recessions and inflation and the consequences of public debt is to take an introductory economics course and do all the problem sets. The second-best way? Read “The Little Book of Economics.” Don’t be fooled by its compact form and breezy writing: This book, by the Wall Street Journal chief economics commentator Greg Ip, manages to pack in just about everything you wanted to know but were afraid to ask about the gross domestic product.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 163 Shares169 Views

    in Economy

    How Is the Economy for Black Voters? A Complex Question Takes Center Stage.

    by

    The 2024 election could be won or lost on the strength of the Black vote, which could in turn be won or lost based on the strength of the American economy. So it is no surprise that candidates are paying a lot of attention — and lip service — to which of the past two administrations did more to improve the lives of Black workers.Former President Donald J. Trump, the Republican candidate, makes big claims about the gains Black workers made under his watch, saying that he had the “lowest African American unemployment rate” and “the lowest African American poverty rate ever recorded.” But those measures improved even more under the Biden administration, with joblessness touching a record low and poverty falling even further.“Currently, Black workers are doing better than they were in 2019,” said Valerie Wilson, a labor economist whose work focuses on racial disparities at the liberal-leaning advocacy organization EPI Action.That may sound like an unambiguous victory for Vice President Kamala Harris, the Democratic nominee, especially when paired with a recent increase in homeownership rates for Black families and the fact that the Black unemployment rate dipped in September.But even with those notable wins, the economy has not been uniformly good for all Black Americans. Rapid inflation has been tough on many families, chipping away at solid wage growth. Although the labor market for Black workers was the strongest ever recorded for much of 2022 and 2023, the long shadow of big price increases may be keeping people from feeling like they are getting ahead.In fact, nearly three in four Black respondents rated the economy as fair or poor, a recent New York Times/Siena College poll of Black likely voters found. And that is notable, because Black voters do tend to prioritize economic issues — not just for themselves, but also for the overall welfare of Black people — when they are thinking about whether and how to vote.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 125 Shares119 Views

    in Economy

    Trump’s Tariff Plans Would Fuel Inflation, Janet Yellen Will Warn

    by

    The Treasury secretary plans to criticize former President Donald J. Trump’s economic proposals in a speech.Treasury Secretary Janet L. Yellen plans to warn in a speech on Thursday that the economic policies being proposed by former President Donald J. Trump would fuel inflation and harm businesses, raising alarm about the risks of blanket tariffs.The critique, which is set to be delivered in remarks to the Council on Foreign Relations, comes less than a month before the presidential election. Mr. Trump and Vice President Kamala Harris have outlined starkly different views about how they see America’s role in the global economy. Although Ms. Yellen is not expected to mention Mr. Trump by name, she will argue that the broad tariffs the former president and some Republicans in Congress support would damage the U.S. economy.“Calls for walling America off with high tariffs on friends and competitors alike or by treating even our closest allies as transactional partners are deeply misguided,” Ms. Yellen plans to say in her speech, which was obtained by The New York Times. “Sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive.”Mr. Trump imposed tariffs on hundreds of billions of dollars of foreign products during his presidency, but his plans if he is re-elected would dwarf those moves. On previous occasions, Mr. Trump suggested imposing tariffs of 10 to 20 percent on most foreign items, as well as a tariff of 60 percent or more on goods from China, in addition to other levies.This week, Mr. Trump suggested he might impose across-the-board tariffs of as much as 50 percent to force foreign companies to produce in the United States to avoid the levies.“The most beautiful word in the dictionary is tariff,” Mr. Trump said, adding, “It’s my favorite word.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More