“Inflation may have tumbled from multi-decade highs on both sides of the Atlantic, but progress has stalled in the United States, with the Federal Reserve now expected to start cutting interest rates well after its European counterpart.
Meanwhile, among the 20 countries that use the euro, annual consumer price inflation has slowed steadily since the start of the year. It stood at 2.4% in March.
So why does the United States appear to have a bigger inflation problem than Europe?
Annual US inflation, as measured by the Fed’s preferred gauge, the Personal Consumption Expenditures index, came in at 2.7% in March, accelerating from 2.5% in February.
The Fed aims to keep inflation at 2% over the longer run.
The weight given to owner-occupiers’ housing costs is much bigger in the US CPI than in the PCE — 32% versus 13%, according to consultancy Capital Economics — but both weights are still much larger than the 0% afforded to these costs in the eurozone’s key measure of consumer prices.
US employers are hiring at a historic clip, adding 303,000 jobs in March. Washington has also spent a lot more than European governments in recent years to support consumers and businesses through the pandemic, something that has kept consumer demand particularly robust in the United States.
Despite preliminary data Thursday that showed weaker-than-expected US growth in the first quarter, Treasury Secretary Janet Yellen told Reuters that the economy was still “firing on all cylinders.”
The Europeans aren’t printing massives amounts of cash and spending borrowed money on consumption
Maybe because Europe, at the start of the economic crisis, turned the dial up to the point of economic stagnation. The U.S. prioritized balance. These decisions have consequences across all time horizons.
Who knew with corporations controlling our politicians this would happen
Its a real conundrum
A ton of peoples baseline costs actually went *down during the pandemic* because of the 30 year mortgage then had their mortgage rate stuck at ~2-3%.
In most European (and Canada) countries ARMs meant that money got sucked out of the economy real fast as existing homeowners saw their mortgage payments increase rather than just people who moved in that time
Because our corporate overlords don’t want it to happen
Maybe it’s the higher taxes in Europe?
Wouldn’t that take money off the table, just like raising interest rates?
Declare victory? We’re quite aways away from that.
Because our inflation is caused by monopolies, and we don’t have enough cops walking that beat. So the criminals can pretty much do whatever they want
Plus we’ve got a *ton* of judges on the take and nobody’s willing to throw them out.
Because we arent working together and we’re greatly politically divided so we can’t just choose a direction and we’re quibbling over stuff that’s less important.
Because corporations keep raising prices to keep the earning pumped and in dec JPow declaring early-victory over inflation. Throw high wagers spending on housing like there is no tomorrow.
So we can make up stuff by just putting it on titles in reddit? Cute.
Rubbish! Germany is going through a rough phase and prices are high. France, Italy all have the same problem
3.5% inflation is not bad. However, the low immigration rate makes inflation worse. More workers mean lower prices. Also, trade lowers inflation. The US has been stepping back from trade deals. Basically one country gets lower inflation the other gets lower unemployment.
probably because we keep sending hundreds of billions of newly printed money to support wars internationally
Because capitalism has destroyed the world. Things will keep getting worse and there’s no end to it.
16 comments
“Inflation may have tumbled from multi-decade highs on both sides of the Atlantic, but progress has stalled in the United States, with the Federal Reserve now expected to start cutting interest rates well after its European counterpart.
Meanwhile, among the 20 countries that use the euro, annual consumer price inflation has slowed steadily since the start of the year.
It stood at 2.4% in March.
So why does the United States appear to have a bigger inflation problem than Europe?
Annual US inflation, as measured by the Fed’s preferred gauge, the Personal Consumption Expenditures index, came in at 2.7% in March, accelerating from 2.5% in February.
The Fed aims to keep inflation at 2% over the longer run.
The weight given to owner-occupiers’ housing costs is much bigger in the US CPI than in the PCE — 32% versus 13%, according to consultancy Capital Economics — but both weights are still much larger than the 0% afforded to these costs in the eurozone’s key measure of consumer prices.
US employers are hiring at a historic clip, adding 303,000 jobs in March. Washington has also spent a lot more than European governments in recent years to support consumers and businesses through the pandemic, something that has kept consumer demand particularly robust in the United States.
Despite preliminary data Thursday that showed weaker-than-expected US growth in the first quarter, Treasury Secretary Janet Yellen
told Reuters that the economy was still “firing on all cylinders.”
The Europeans aren’t printing massives amounts of cash and spending borrowed money on consumption
Maybe because Europe, at the start of the economic crisis, turned the dial up to the point of economic stagnation. The U.S. prioritized balance. These decisions have consequences across all time horizons.
Who knew with corporations controlling our politicians this would happen
Its a real conundrum
A ton of peoples baseline costs actually went *down during the pandemic* because of the 30 year mortgage then had their mortgage rate stuck at ~2-3%.
In most European (and Canada) countries ARMs meant that money got sucked out of the economy real fast as existing homeowners saw their mortgage payments increase rather than just people who moved in that time
Because our corporate overlords don’t want it to happen
Maybe it’s the higher taxes in Europe?
Wouldn’t that take money off the table, just like raising interest rates?
Declare victory? We’re quite aways away from that.
Because our inflation is caused by monopolies, and we don’t have enough cops walking that beat. So the criminals can pretty much do whatever they want
Plus we’ve got a *ton* of judges on the take and nobody’s willing to throw them out.
Because we arent working together and we’re greatly politically divided so we can’t just choose a direction and we’re quibbling over stuff that’s less important.
Because corporations keep raising prices to keep the earning pumped and in dec JPow declaring early-victory over inflation. Throw high wagers spending on housing like there is no tomorrow.
So we can make up stuff by just putting it on titles in reddit? Cute.
Rubbish! Germany is going through a rough phase and prices are high. France, Italy all have the same problem
3.5% inflation is not bad. However, the low immigration rate makes inflation worse. More workers mean lower prices. Also, trade lowers inflation. The US has been stepping back from trade deals. Basically one country gets lower inflation the other gets lower unemployment.
probably because we keep sending hundreds of billions of newly printed money to support wars internationally
Because capitalism has destroyed the world. Things will keep getting worse and there’s no end to it.