The rising cost of living in America.
The new report of the US Department of Commerce shows that the spending of American consumers increased the most in January this year for the first time in the last 2 years.
According to this report, while the inflation rate has increased significantly and wages and salaries have also increased, the Ministry of Commerce announced in its latest report that the spending of American consumers in January of this year for the first time in the last 2 years , has increased the most.
With this increase, concerns about the central bank continuing to raise interest rates in the summer of this year have intensified. Also, this report shows that the economy is on the verge of a very dangerous recession.
Meanwhile, earlier this month, another report showed that there was a very good job growth in January, and at the same time, the lowest unemployment rate was recorded in more than 53 years.
According to this report, consumer spending, which accounts for more than two-thirds of US economic activity, increased by 8.1 percent in January. This figure has been the largest increase since March 2021.
Meanwhile, consumer spending has increased by 1.1 percent in line with inflation, which has been unprecedented since March 2021. But real consumer spending fell in November and December last year.
Accordingly, consumers have paid more for durable goods such as motor vehicles, home furnishings, and recreational goods. They also paid more for buying clothes and the cost of goods in general increased by 2.8%.
Also, according to this report, the costs of services, including services related to health, transportation, and entertainment, have increased significantly.
However, another report of the Ministry of Commerce, pointing to the increase in consumer spending at the beginning of the first quarter of the new year, reported a 2.7 percent increase in home sales in January.
The consumer price index also indicates that there is an increase of 0.6 percent in January, which is unprecedented since June 2022. This index has increased by 4.5% in the 12 months ending in January.
Economic analysts believe that the increase in household expenses and the decrease in people’s ability to save money are probably due to the concerns caused by the economic recession.
Meanwhile, US President Joe Biden signed the deflation law in August. The law provides for a $370 billion aid program that, among other things, will strengthen renewable energy and industry in the fight against climate change. However, it also includes clauses requiring companies to invest and manufacture in the United States.
The European Union is very concerned about the consequences of the implementation of this law for its economy.
Deflation Act The United States has subsidized parts of its economy. This law provides benefits to companies that manufacture in the United States.
Economists forecast US GDP to be flat in the first half of 2023.