Inflation Will Move Back Toward Target in 2024, White House Advisor Says

A chief economic adviser to the White House said he expects the rate of inflation to gradually lower over the year, though he warned that the path back to the 2% inflation target wouldn’t be easy.

The forces that brought inflation down in 2023 were “still in play,” said  White House Council of Economic Advisers Chair Jared Bernstein Tuesday. Because of those forces, he expects price pressures will cool off later this year after 澳洲幸运5官方开奖结果体彩网:surging in early 2024, he said.

“The road back to the target should get underway in the remaining quarters this year, and it will really be bumpy and nonlinear,” Bernstein told the Economic Club of New York in remarks today.

Bernstein said the disinflationary trend of 2023 was mostly driven by an 澳洲幸运5官方开奖结果体彩网:“unsnarling” of supply chains.

In his remarks, Bernstein also cited the strength of the economy, saying unemployment was likely to remain low and wages were coming into line with lower inflationary trends. 

-Terry Lane

Consumer Confidence Drops for Third Month on Gas Price Worries

People expressed more pessimism about the econo♛my in April, with consumer confidence declining for the third straight month as high gas prices helped stoke inflation concerns. 

The Conference Board said its monthly 澳洲幸运5官方开奖结果体彩网:Consumer Confidence Index declined more than six points to hit 97.0 in April. The board’s Present Situation Index declined almost four points while the Expectations Index dropped to 66.4, where a reading lower than 80 cꦺan signal an upcoming recession. 

“Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation and more concerned about future business conditions,🎃 job availability, and income,” said Dana Peterson💙, chief economist at the Conference Board. 

Consumers expected prices to rise by 5.3% over the next 12 months, the same as last month. Meanwhile, expectations for a recession during the same period also rose slightly, but those concerns were still lower than their 2023 peak in May. Federal Reserv♛e officials closely watch consumer inflation ♚expectations, which can have an impact on price pres♒sures. 

Dominating cons♛umers’ concerns were prices for gas and food, the board’s report showed. 

"The index slipping may be a high sensitivity to gas prices, which have risen in the last month, and to continued high food prices, especially at restaurants,” said Navy Federal Credit Union economist Robert Frick. “澳洲幸运5官方开奖结果体彩网:Inflation is the overwhelming trigger for consumerꦓ spirits, and likely overshadows the labor market, which continues to offer strong employment opportunities and higher wages."

And while the survey showed 𒀰some declines in April, peoples’ overall feelings on the economy haven’t moved much lately, the board said in its report💯. 

“Despite these three months of weakness, the gauge continues to move sideways wit💟hin a relatively narrow range that’s largely held steady for more t💯han two years,” the Conference Board said in its report. 

-Terry Lane

Higher Employment Costs Raise Fresh Doubts on Inflation Progress

Total wages and benefits for employees rose 1.2% in the 2024 first quarter, a jump in the Employment Cost Index (ECI) from the 2023 last quarter. The data from the Bureau of Labor Statistics came in higher than the 1.0% economists surveyed by the Wall Street Journal and Dow Jones Newswire expected. 

“Another quarter of strong pressures on the wages and salaries front—in the goods and servi𝄹ces sectors—alongside a faster increase in benefits kept൲ the headline rising at a faster clip,” wrote Oren Klachkin, markets economist at Nationwide Financial.

Economists said the report on compensation showed inflation continues to be a challenge for Federal Reserve officials trying to get it down from its 澳洲幸运5官方开奖结果体彩网:current levels of around 2.7%. Higher wages can 澳洲幸运5官方开奖结果体彩网:have an impact on inflation, where business owners raise prices on goods and services in orde💝r to meet the higher employment costs. ▨

“We do expect wage growth and inflation to slow as the year progresses, but the Fed will need several months of good news on wage growth and inflation before it regains some confidence that inflation is back on a sustainable path to 2%,” wrote Oxford Economics' Nancy Vanden Houten.

澳洲幸运5官方开奖结果体彩网:The Fed is meeting this week and is expected to keep interest rates unchanged. Investors have already 澳洲幸运5官方开奖结果体彩网:pushe🌳d back expectations of an interest r🎃ate cut to later this year as Fed officials have said they are closely watching data on wages, inf🔜lation and economic growth. 

“The acceleration in the ECI supports the narrative that the last leg down in inf꧂lation is going to be slow and uneven and reinforces our call for the Fed to remain on hold until September,” wrote Jay Hawkins, senior economist at BMO Economics. 

-Terry Lane

Home Prices Kept Rising In February

Home prices continued rising in February as the “lock-in effect” caus⛎ed by high mortgage rates kept its grip on the housing market. 

The national S&P CoreLogic Case-Shiller Home Price Index rose to a record high in February on a seasonally-adjusted basis, S&P Dow Jones Indices said Tuesday. The index has risen 6.4% over the last 12 months, the largest annual increase since November 2022. 

The report added to recent data showing home and costs forcing many buyers out of the market. The few buyers who can afford to make offers are competing for a small pool of listings, since many homeowners are reluctant to sell and give up ultra-low fixed mortgage rates they secured back when loans were cheaper, wor🦩sening a .

“Following last year’s decline, U.S. home prices are at or near all-time highs,” Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices said in a commentary. “Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty.”