Inflation Worse Than We’re Being Told, Jobs Not As Good Either
IN THIS ISSUE:
1. Inflation Hits 40-Year High, But Really Is Even Higher
2. The Strong Jobs Market Slows Significantly In August
3. The US Consumer Sentiment Index Hits Record Low
4. Conclusions: So, Are We In A Recession Or Not?
Overview: Inflation Higher Than Reported, Jobs Not As Strong Either
Over the summer, we’ve been told that inflation rose to a 40-year high. It’s even higher than that if measured by conventional methods of the past. We’ve also been told the labor market is the tightest in decades, a good thing, but that’s not entirely true either. The fact is, consumer finances have deteriorated at the fastest rate ever this year, making a recession even more likely. While not good news, that’s what we’ll talk about today.
The debate rages on about whether we’re already in a recession or not. I have argued in recent weeks that the answer is not clear yet. However, the evidence is mounting that if we’re not in a recession yet, we will be soon. Today I’ll try to pull the latest economic reports together and make some sense of it all, if that is possible. Let’s start with inflation.
Inflation Hits 40-Year High, But Really Is Even Higher
Over the 12 months ended June 2022, the Consumer Price Index for All Urban Consumers increased 9.1%. The 9.1% increase in the “all items” index was the largest 12-month increase since November 1981 – over 40 years. While the CPI decreased slightly in July to 8.3%, it is still the highest in decades.