If the government help will be not coming during AI era, like things were during outsourcing to China, political shakeup will be spectacular this time. Trump will be nostalgic memory.
“Economists and markets breathed a sigh of relief on Friday when inflation numbers finally arrived. Inflation had ticked up, but it wasn't the disaster many forecast earlier in the year when President Trump launched his trade war.
In the spring, economists surveyed by The Wall Street Journal said they expected inflation to hit 3.6% by the end of this year.
Annual inflation came in at 3% in September compared with a year earlier, better than the most recent expectations.
Yet the news that inflation could be worse is hardly comforting for millions of Americans still flabbergasted at the prices of necessities like food, housing and insurance. Prices are still rising faster than the Federal Reserve's 2% target.
That comes on top of years of runaway inflation after the pandemic, when the federal government flooded the country with money to prop up the economy.
Wealthy Americans, whose finances are buoyed by a rocket-fueled stock market, absorb the sting and keep spending. But wage increases have slowed for middle- and working-class Americans, leaving many households struggling to pay their bills.
"It's disheartening to see," said Travis Crooke, a real-estate professional in Steamboat Springs, Colo. Crooke and his wife, Cassie, rarely go out now and travel less because of rising prices. They are also holding off on replacing their almost 15-year-old car.
Even though the couple earns just over $100,000 a year, they can't set money aside. "We're able to pay our bills, but we're not saving," he said. "We're not getting ahead."
Director of the National Economic Council Kevin Hassett told reporters on Friday that the overall "numbers were fantastic." He blamed the 3% rise on a shutdown at an Indiana refinery, which increased gas prices across the Midwest.
Natural gas and electricity saw some of the biggest annual price increases in September, and food costs also rose slightly faster than overall inflation. Coffee prices surged 18.9% over the past year and the price of beef rose 14.7% to a record. Middle- and working-class households tend to spend a bigger share of their income on food and utilities than their wealthier counterparts, meaning these price increases hit them harder.
In a Pew Research Center survey conducted in September, 74% of respondents said economic conditions are fair or poor. The most commonly cited reason: high inflation.
In a survey by personal finance company Bankrate, 62% of respondents said their pay isn't keeping up with prices -- the highest share in four years.
The University of Michigan on Friday said its monthly survey of consumers in October showed that people continue to expect much higher inflation readings in the year ahead than they did before the pandemic. Expectations of higher inflation can themselves help nudge prices higher, as consumers move up planned purchases and demand higher pay.
People also think that inflation is hurting them now, according to the Michigan survey. Far more people felt they were worse off financially versus a year ago than thought they were doing better, and the biggest reason why was higher prices.
And 68% said they didn't expect their incomes would keep up with inflation over the next year, tying a record set in May.
This fall, mayoral and gubernatorial candidates are looking to capitalize on frustration over high costs. In Virginia, Democrat Abigail Spanberger is running for governor on a platform to make the state more affordable. In New York City, Democratic mayoral candidate Zohran Mamdani is proposing free buses, free child care and rent freezes on many apartments.
In Miami, where housing costs have surged in recent years, mayoral candidates vow to lower the cost of living. One candidate has come out in favor of scrapping property taxes for many residents, another proposed building housing on city-owned land to ease pressure on rents, and another candidate proposed free public transit.
Many companies are opting to spread out tariff-related price increases rather than push them through all at once. This scenario may be short-lived. In a third-quarter survey conducted by Duke University and the Federal Reserve Banks of Richmond and Atlanta, U.S. chief financial officers said they plan to raise prices by 4.3% next year versus this year, on average. Absent tariffs, they said they would have expected to raise prices 3.2%.
"We're not anywhere near the end of these price increases from the tariffs," said Duke University economist John Graham, who helps direct the survey.
Prices of cheaper goods have risen faster than those of more expensive goods, said Alberto Cavallo, an economist at Harvard Business School who tracks prices at major retailers. That disproportionately hurts lower-income Americans.
Weak income growth makes inflation more painful. In early 2023, lower-income households saw annual wage growth of over 6%, according to Bank of America data, roughly on par with inflation at the time. This September, their wage growth was down to just 1.4%, well behind the inflation rate of 3%.
In New Bedford, Mass., Iola Bizarro works 40 hours a week at a golf-ball factory. Her take-home pay after taxes and deductions is between $1,000 and $1,100 every two weeks. That isn't enough to pay her bills, the 48-year-old said.
The rent for the three-bedroom New Bedford apartment she shares with her two children is $1,600 a month, and car payments eat up an additional $756.54. The cost of utilities and groceries keeps going up. Milk and egg prices have "gone out of control," she said. Bizarro has racked up almost $4,000 in credit-card debt on groceries and struggles to pay her utility bills on time.
"It's a hard life right now," she said.” [1]
1. U.S. News: Tame Inflation Leaves Many Scraping By. Putzier, Konrad; Lahart, Justin. Wall Street Journal, Eastern edition; New York, N.Y.. 27 Oct 2025: A3.
Komentarų nėra:
Rašyti komentarą