Price gouging

[Rach3]

As I've said here before and an issue for the 2024 election:


"Americans are still worried about their financial stability even as their recession fears lessen. High prices at the grocery store and consumers’ memories of their pre-pandemic budgets may be playing a role. Here’s what financial and economic experts have to say about what this week’s economic indicators tell us about people’s perception of the economy.

What is driving consumer confidence?

The Consumer Confidence Index, released by the business nonprofit and research organization the Conference Board, is a survey indicating how optimistic or pessimistic consumers feel about their financial well-being and the economy.

The Consumer Confidence Index fell slightly in March from 104.8 to 104.7, well below some economist expectations of 106.5. Although consumers’ perception of the likelihood of a recession fell this month, consumers were less confident about their family’s financial situation in the next six months. The percentage of consumers who expected their incomes to fall rose from 11.9% in February to 13.8% in March.

Elizabeth Pancotti, director of special initiatives for the Roosevelt Institute, said that consumers’ experience of the economy and their financial situation may come down to crises they’re feeling that may not show up at a macro level but may strike their budgets particularly hard.

“When egg prices finally come down and chicken prices finally come down, but orange juice is high because of some random citrus greening disease or some other shocking food item, your total grocery bill doesn’t come down and that really highlights it,” she said. “There’s one crisis after another at a micro level, which I think is really why we’re not seeing that divergence between overall economic strength and at a very micro level, the feelings of average consumers.”

Pancotti acknowledged that housing is also one of the highest expenses for consumers right now, and those prices aren’t showing as much movement as other areas of consumers’ budgets.

“For most families, it is the largest purchase they make every month,” she said.

Why isn’t consumer sentiment higher?

Consumer sentiment, a smaller survey conducted by the University of Michigan, also gauges people’s sense of the economy overall, the labor market, and how they see inflation. On Thursday, U.S. consumer sentiment jumped to 79.4 from 76.9 in February and 62 a year earlier, making this its highest level since July 2021.

Joanne Hsu, director of the survey, said in the report that this number is an indication that consumers believe the economy is “holding steady.”

“As the election season progresses and debates over economic policy become more salient for consumers, their outlook for the economy could become more volatile in the months ahead,” she added.

Kevin Kliesen, business economist and research officer at the Federal Reserve Bank of St. Louis, said consumer confidence and consumer sentiment are still far below pre-pandemic levels and it’s a puzzle as to why when the economy has “been growing fairly strongly” in the past year and a half. But like Pancotti, he added that high prices at the store compared to pre-pandemic prices may be playing a role in those measures.

“If you’re like me, you look at something, and you go, ‘Oh my gosh. I remember when it was so much less before the pandemic.’ So I think that calls into question, probably, a lot of people’s perceptions of the overall state of the economy and importantly their consumer finances,” he said.

What can we expect from inflation and the Fed?

As the Federal Reserve looks to its favorite inflation measure, the personal consumption expenditures price index, economists are watching the PCE closely for signs the Fed will cut rates in the coming months. This policy change is expected to have effects on the housing market as well as the growth of businesses.

The PCE rose 0.3% from January to February and 2.5% over the past year, according to the Bureau of Economic Analysis’s Friday release. Fed Chairman Jerome Powell responded to the news when he spoke at the San Francisco Fed and said the numbers were “in line with expectations” but not as reassuring as the numbers Fed officials saw last year.

Despite this reception from Powell, some financial experts believe inflation will ease up soon. Cristian Tiu, associate professor of finance at the University at Buffalo, said that although the economy is adding jobs, he doesn’t believe the quality of those jobs is high enough to sustain this price growth for much longer.

“Prices basically on consumer goods can’t be driven up forever just by the very top of the wage distribution. The rest of the wage distribution actually looks pretty modest. So I don’t think these price increases can actually be sustained,” Tiu said.

For this reason, he doesn’t think the Fed should continue to put brakes on the economy through restrictive monetary policy. Tiu added that he sees inflation as driven partly by corporate profit-seeking, with companies taking advantage of inflation to continue to keep prices higher than they can justify for the American consumer."


Casey Quinlan

Casey Quinlan is an economy reporter for States Newsroom, based in Washington D.C. For the past decade, they have reported on national politics and state politics, LGBTQ rights, abortion access, labor issues, education, Supreme Court news and more for publications including The American Independent, ThinkProgress, New Republic, Rewire News, SCOTUSblog, In These Times and Vox.

[Rach3]

Another inflationary factor is labor shortage and not just in housing, but here is an article on housing:

https://www.cnn.com/2024/03/21/business ... index.html

Of course, one of Trump's right hand men is xenophobe Stephen Miller, as is most of MAGA.

[Rach3]

As I've said here before and an issue for the 2024 election:

https://www.cnn.com/2024/05/05/business ... index.html

[Belle]

Another inflationary factor is labor shortage and not just in housing, but here is an article on housing:

https://www.cnn.com/2024/03/21/business ... index.html

Of course, one of Trump's right hand men is xenophobe Stephen Miller, as is most of MAGA.

Firstly, every western economy needs ordered, legal migration to fill employment because people in every developed country are not breeding in replacement numbers - more or less since the advent of the Pill. (Japan is in a perilous position and one idiot President called this major ally 'waaaysist'!) However, many of these migration intakes are a ponzi scheme to boost the economy and make the host nation's financial indices look better!! Conservatives are just asking for compatible migration, that's all, and in fewer numbers as we don't have infrastructure up to speed (in Australia, at least). But you'll never get a Lefty (as opposed to a moderate or centrist) to understand about Nett BENEFITS to Treasury versus Nett COSTS to Treasury of this uncontrolled migration. Oh, look over there....at the xenophobes. Low, low resolution.

Secondly, most of those price rises and the attendant economic woes are a direct consequence of the shutdowns during the pandemic. Supply chain issues, failing businesses and falling returns are now being felt everywhere. The chickens are coming home to roost. Only a lefty could complain that it's all because of 'price gouging'. The victim mentality never lends itself to anything by way of nuanced understanding of anything really. Zero economic or sociological imagination carries a heavy cost. And if you only read the NY Times - which has an agenda to have the Democrats re-elected - you're never going to get the right information. The people who own, staff, buy and read that paper don't care about the people in the rest of the country, or their views. Same with much of the legacy media, particularly CNN and WAPO. For activists by activists.

Back when your economy collapsed in 2007 and housing prices dropped to record lows - which was inter alia because of Collateralized Debt Obligations and the repeal by Clinton of the Glass-Steagall Act- banks were permitted to become commercial and investment entities. This they did with abandon.

Do not expect an honest or informed discussion about any of this from the partisan NY Times. (An astute investor in the USA would have bought some of that 'cheap as chips' housing and be laughing now!! There will be millions who did so and who will now be consequently providing homes for 'the migrants'.)

I can tell you that Donald Trump would be across all this, but it still won't see him elected. He has no plan beyond his own re-election. You can continue to refer to half of your country as MAGA and 'deplorables', if it makes you feel better.

The other night I watched an interview on YT with Arthur Miller from 1994. He talked about the USA being divergent in its interests and preoccupations; he said, for example, that the people in Kansas (just as one example) think in a completely different way to other states but particularly in the populous seaboard states. What interests those latter is of little or no interest to the remaining part of the US. We have the same thing in Australia with the people outside our two major cities - Sydney and Melbourne - having concerns and values light years away from their urbanized counterparts.