Reflecting the economic recovery, US consumer confidence hit 127.3 in June, its highest level since March 2020, the start of the pandemic. In addition to giving positive signals about the economic course, it is important in terms of the contribution of households to consumption. As people’s spending ability increases, their consumption tendencies also increase. This is also the subject of scrutiny in terms of their marginal contribution to inflation over demand.
If we look at the sub-indices; The Current Situation Index, based on consumers’ assessment of current business and labor market conditions, rose from 148.7 to 157.7. The Expectations Index, based on consumers’ short-term outlook for income, jobs and labor market conditions, rose to 107 from 100.9 last month. The strong growth in the 2Q21 period and the bounce effect of the economic growth from last year’s bottom level have also had an impact on optimism in the short term. While individuals’ tendency to private consumption, that is, to think more about buying houses, cars and white goods, will continue to support growth, it is seen that inflation increases have little effect on these preferences for now. However, as employment improves and regular income increases, wage inflation and spending ability improve among Americans, consumption may remain at optimal levels. Inflationary pressures will continue to be driven mainly by material prices and tight supply conditions.
Inflation uncertainty may force the market to deal with Fed “tapering” uncertainty for a while. FOMC members will continue to send mixed signals, but as inflation remains uncertain, the hand of those advocating early rate hikes will get stronger. The details of the data that will affect inflation expectations are important, but such situations can cause a Catch-22 situation for the Fed.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
