US inflation was 4 percent a month ago and is now 3 percent. “For the first time in a very long time, it’s time to celebrate in America,” says economist Edin Mujakic.
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Core inflation, excluding fuel and food prices, has eased slightly, but “is still high,” Mujajic insists. However, the inflation figures are mainly dominated by the price change of rental housing. ‘In America there is a kind of funda where an index is kept which shows what is being asked for new rental houses. That index is a good predictor of what the inflation rate will do,’ says the economist.
No wonder inflation is on the rise
However, that forecast is ahead of the inflation rate, says Mujakic. ‘It is about twelve months ahead of the rate of inflation. Last year it was 16 percent in the spring, so it’s no surprise that inflation peaked in the US at the end of last year.’ The index’s current figure can also give an indication of the future inflation rate, Mujagic expects. “If you look at the Funda-VS index prices, they are now at 5.3 per cent. That means that unless crazy things happen in other parts of the economy, inflation will fall further in the coming months.’
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But the influence of other parts of the US economy should not be underestimated. “If you’re an average man or woman in America, it’s almost a schizophrenic feeling. If you go to fill up the car, you’ll notice that inflation is low. But if you drive to the supermarket to buy food, you’ll notice that inflation is still high. The added benefit for the American citizen is higher wages.” are more than because they add up to 4.4 percent.”
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