America can rejoice at the rate of inflation

Where US inflation was still 4 percent a month ago, it is now 3 percent. “For the first time in a long time, it’s time for celebration in the United States,” says economist Edin Mojacic.

podcast | America can rejoice at the rate of inflation

Core inflation, which excludes fuel and food prices, has also decreased slightly, but “it is still high,” Mojácic stresses. However, the inflation figures are mainly dominated by the change in rental housing prices. There is a kind of Funda in the United States where an index is kept, which shows what rents are being ordered for new homes. This indicator predicts very well what the inflation rate will do,” says the economist.

No wonder inflation is so high

However, these expectations are ahead of the inflation rate, Mojácic says. “It’s about twelve months ahead of the inflation rate. Last year it was 16 percent in the spring, so it’s no wonder that inflation in the United States peaked at the end of last year,” he said. Mojacic expects that the current figure of the index can give an indication of the inflation rate. In the future If you look at the Funda-VS index prices, it’s now at 5.3 percent, which means if crazy things don’t happen in the rest of the economy, inflation will fall even further in the coming months.

Also read | US inflation is close to normal

But the impact of other parts of the US economy should not be underestimated. “If you are a normal man or woman in the United States, it feels almost schizophrenic. If you go to refuel the car, you will notice that inflation is low. But if you then go to the supermarket to buy food, you will notice that inflation is still high. An additional advantage for a US citizen is Increase wages.”They are higher than inflation, because they are more than 4.4 percent.”