Where the US inflation rate was still 4% a month ago, it is now 3%. “For the first time in a long time, it’s time to celebrate in the United States,” says economist Edin Mujagic.
podcasts | “America can cheer because of the inflation rate”
Core inflation, which excludes fuel and food prices, also fell slightly, but “it’s still high,” Mujagic said. However, inflation data is mainly dominated by the change in rental accommodation prices. ‘There’s a sort of Funda in the US where they keep an index, which shows what’s in demand for new rental homes. That index predicts very well what the inflation rate will do,’ says the economist.
“No wonder inflation has risen”
However, that forecast is higher than the inflation rate, Mujagic says. “It’s about twelve months ahead of the inflation rate. It stood at 16 percent in the spring last year, so it’s no wonder US inflation peaked late last year. The current index figure could also give an indication of the future rate of inflation, Mujagic expects. ‘If I look at the Funda-VS index prices, they are now at 5.3%. This means that unless crazy things happen in the rest of the economy, inflation will drop even more in the coming months.
But the influence of other parts of the US economy shouldn’t be underestimated. “If you’re an average man or woman in the United States, it’s almost a schizophrenic feeling. If you go to refuel in your car, you will notice that inflation is low. But if you then go to the supermarket to buy food, you realize that inflation is still high». An additional benefit for the American citizen are wage increases. “They are higher than inflation, because they are more than 4.4%.”
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
