Personal Spending
PCE
Confronted with these facts, I have no doubt that the Federal Reserve will continue to raise rates aggressively, because of the institutional imperatives of this organization, and a general desire by the forces of finance to keep wages low and workers in precarity:
Consumer prices and spending rose more slowly in May, but the Federal Reserve likely remains on track to raise interest rates in July amid recent signs of healthy economic activity.
The Fed’s preferred inflation measure, the personal-consumption expenditures price index, rose 3.8% from a year earlier, its lowest reading in two years, the Commerce Department said Friday.
Household spending rose 0.1% in May but was flat when adjusted for inflation, a possible sign of flagging economic growth. Americans spent more on services such as healthcare and air travel, and less on goods such as autos.
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So-called core prices, which exclude volatile food and energy categories, rose 4.6% in May from a year earlier, down slightly from 4.7% in April. Economists see core inflation as a better predictor of future inflation than overall inflation.
Senior Fed officials have focused attention this year on prices for a subset of services that exclude energy and shelter. They think these labor-intensive services could show whether wage pressures from tight labor markets are passing through to consumer prices, especially because they have expected price increases for housing and goods to slow.
That reading rose 0.2% in May from the prior month and 4.5% from a year earlier, according to Wall Street Journal calculations. The reading rose at a 3.9% annualized rate over the past three months, down from 5.3% over the three months before that.
The issue here is a public health catastrophe that has eliminated something in excess of 2% of the work force, and an economy dominated by monopolies and oligopolies that results in very little price discipline.
Addressing this as excess demand overheating the economy is a stupidity.
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