INFLATION is at a 40-year high, with National Retail Federation (NRF) chief economist Jack Kleinhenz declaring that it's not hitting all consumers the same way, reports the American Journal of Transportation.
'After decades of relatively low levels, inflation is on everyone's mind and has been making consumers and businesses miserable as prices have picked up dramatically over the past year,' said Mr Kleinhenz.
'However you measure it, inflation has become a powerful force and plays a key role in the nation's economic outlook.'
'While actual price gains are expected to slow down in the coming months as they lap relatively high readings from the year before, the Fed is concerned about the risk of an unwanted jump in inflation expectations,' said Mr Kleinhenz.
'If consumers expect rampant inflation to continue, the possibility of a wage-price spiral could be unleashed as they demand to be paid more. In that scenario, the Fed would need to be even more aggressive with its rate hikes - a move that might stop inflation but at the risk of slowing the economy to the point of causing a recession.'
The March issue of the NRF's Monthly Economic Review cited a 7.5 per cent year-on-year increase in inflation as measured by the Consumer Price Index in January.
'Headline inflation numbers may mask what is being faced by different consumers since spending patterns vary widely and lead to significantly different inflation experiences,' said Mr Kleinhenz.
'What a person buys can have a tremendous effect on how severely the pain of inflation is felt.'
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'After decades of relatively low levels, inflation is on everyone's mind and has been making consumers and businesses miserable as prices have picked up dramatically over the past year,' said Mr Kleinhenz.
'However you measure it, inflation has become a powerful force and plays a key role in the nation's economic outlook.'
'While actual price gains are expected to slow down in the coming months as they lap relatively high readings from the year before, the Fed is concerned about the risk of an unwanted jump in inflation expectations,' said Mr Kleinhenz.
'If consumers expect rampant inflation to continue, the possibility of a wage-price spiral could be unleashed as they demand to be paid more. In that scenario, the Fed would need to be even more aggressive with its rate hikes - a move that might stop inflation but at the risk of slowing the economy to the point of causing a recession.'
The March issue of the NRF's Monthly Economic Review cited a 7.5 per cent year-on-year increase in inflation as measured by the Consumer Price Index in January.
'Headline inflation numbers may mask what is being faced by different consumers since spending patterns vary widely and lead to significantly different inflation experiences,' said Mr Kleinhenz.
'What a person buys can have a tremendous effect on how severely the pain of inflation is felt.'
SeaNews Turkey