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    Consumers Are Doing Better Even With High Inflation

    Inflation is of increasing concern to policy makers, analysts and consumers.The first two groups Talk When it comes to inflation, it’s the consumers who have to deal with it. Consumers have limited resources and must make sacrifices as prices rise.

    The latest inflation report raises concerns that consumers may already be late. September consumer price index rose 5.4%, CNBC said I got it It was “the highest since January 1991”.

    As usual, economist He emphasized that the data contains good news. “However, excluding volatile food and energy prices, CPI increased 0.2% month-on-month and 4% year-on-year, compared to their respective estimates of 0.3% and 4%.”

    Consumers agnostic to high inflation

    Of course, as consumers, we know that we can’t exclude food and energy from our budgets, and we need to deal with the inflation we see in grocery stores and gas pumps.

    Gas prices rose 1.2% in September, up 42.1% compared to a year ago. As winter approaches, fuel oil used to heat many homes has already increased by 42.6% compared to 2020. In supermarkets, consumers have noticed that meat prices have risen 12.6% year-on-year.

    Not surprisingly, retail spending is higher than it was a year ago. As prices go up, consumers spend more. But even after inflation, consumers are still spending more. During September Retail sales It was 13.6% higher than a year ago.

    The graph below shows that spending increased by 9.9% when the effects of inflation were excluded from the data.

    Higher spending despite higher inflation

    sauce: Optoma..

    The increase in sales seems to be inconsistent with other news. After all, wages have risen by only 4.6% over the past year. This means that sales growth must be driven by savings.

    The Wall Street Journal confirms this, attention: “Economists expect stimulus spending to rise and more generous unemployment benefits to begin to fade, but many stores still feel that consumers are ready to spend.”

    The current trend is unsustainable, but as long as the trend continues, stores can benefit from consumers.

    Michael Carrteeth Editor True Options Master, One Transaction, Peak speed traderWhenPrecision profit.. He teaches technical and quantitative technical analysis at the New York Institute of Finance. Follow him on Twitter@MichaelCarrGuru.

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    The post Consumers Are Doing Better Even With High Inflation appeared first on California News Times.

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