Price Inflation Moves Up Slightly, and Wages Still Aren't Keeping Up \ stacker news ~econ

According to the Bureau of Labor Statistics’ latest price inflation data, CPI inflation in May rose for the second month in a row.

The year-over-year change in the CPI rose by 2.4 percent in May, slightly accelerating over April’s year-over-year increase of 2.3 percent. The month-over-month change (seasonally-adjusted) was positive again in May, rising 0.1 percent, although May’s increase, with the exception of March this year, was the smallest month-over-month increase since mid-2024.

Much of this was fueled by ongoing increases in the cost of shelter and services. Shelter, for instance, rose by 3.9 percent, year over year, while services (less energy services) rose by 3.6 percent. …

We are likely to see some downward pressure on price inflation in coming months, however, since there is increasing evidence that Americans have less disposable income to spend. Home listings are hitting multi-year highs, but far fewer buyers appear interested in purchasing them. Not surprisingly, home prices are beginning to fall, but we appear to be only at the very beginning of this trend. We have yet to see any substantial declines in rents yet, but indications point to overall slowing in shelter prices in CPI measures. Other indicators of stagnating or falling prices can be found in the fact that delinquencies on credit cards, auto loans, and student loans are all at or above the highest levels reported since the Great Recession. This will all cut discretionary spending and put downward pressure on prices in some areas.

It should be noted that even with the economy slowing, we are not seeing price inflation return to truly stable—that is, zero-level—price-inflation levels. Price inflation continues to move upward, and it cannot be said that price inflation has actually gone down in any meaningful sense. It has only decelerated. …

Unfortunately, the average American is unlikely to experience much relief from this trend any time soon. As the economy worsens, the Fed will be pressured to cut the target interest rate so as to “stimulate” the economy. At this point in the business cycle, another interest rate cut is unlikely to do much to prevent continued economy stagnation. Rather, an embrace of even more dovish monetary policy will simply set the stage for building the next boom-bust cycle and prevent badly needed price deflation.

Meanwhile, ordinary people are likely to see more stagnation in real wages, or worse, they may face rising unemployment.

See, this is what you get when the state interferes in the economy; booms and busts, booms and busts in an endless cycle of pain and misery. If we could get rid of the FED and control spending money they don’t have by the federal government, we the people, may just have a chance to recover. Of course, those nearest the spigot will never allow that to happen, so I guess I can just dream on!

30 sats \ 3 replies \ @Undisciplined 13 Jun

If the Supreme Court lifts the injunction against RIFs, then tens of thousands of federal workers are going to hit the labor market in the very near future. That'll put strong downward pressure on wages and spike unemployment.

42 sats \ 2 replies \ @Rothbardian_fanatic OP 13 Jun

Yes, perhaps so, but it is necessary to right-size the state bureaucracy and right-size the unproductive spending that the state does out of habit. The only ones to really suffer from this will be the bureaucrats, those closest to the state money spigot and the war profiteers. Do we care how they survive? It may hurt us in the short-run but in the long-run it will help us.

30 sats \ 1 reply \ @Undisciplined 13 Jun

Oh yeah, it's deeply necessary. It's just worth preemptively explaining why those numbers are doing what they're going to do and be prepared for the fallout.

42 sats \ 0 replies \ @Rothbardian_fanatic OP 13 Jun

It is worthwhile making sure the normies know and accept the fallout. There will still be a lot of noise from the economically and politically ignorant about how this damages everybody because the state is so important for them. There are a lot of normies that will never accept the fallout as being necessary, let alone a good thing.

20 sats \ 2 replies \ @Msd0457890 13 Jun

The fiduciary system is built on a lie, it is not backed by anything, it has no backing of any kind, which causes the money or the little money that is earned to gradually devalue through the invisible tax called inflation, inflation is what denigrates or steals the little value that your money has, your effort and what will lead you to think that they are external factors when it is the same financial system that destroys your money 🫰, your purchasing power.

4 sats \ 1 reply \ @Rothbardian_fanatic OP 13 Jun

This is all done intentionally, too. The system used to protect against that until FDR and his fellow progressive/lefty/collectivist/Marxist/socialist/communist/murderers came to power and ripped the population off in 1933.

10 sats \ 0 replies \ @Msd0457890 13 Jun

Of course, when the gold standard was broken, what gave meaning to money was broken, what gave it value, its backing. When the gold standard was broken, it was the beginning of fiduciary madness, which meant that money was backed by nothing.