Foresee stagflation ｜ High inflation and erosion consumers "chop hands" capabilities in American economic recession intensify

The 21st Century Business Herald reporter Wu Bin reported that it was accompanied by high inflation and high interest rate hikes that did not see for decades. shadow.

On July 12, Eastern time, the International Monetary Fund (IMF) once again lowered the forecast of US economic growth. It is expected that the US economy will increase by 2.3%in 2022, and the forecast given at the end of June is 2.9%. Due to the significant decline in private consumption and expenditure for savings during the epidemic, the IMF also reduced the US GDP growth forecast in 2023 from 1.7%to 1.0%.

IMF warns that the large -scale soaring inflation is constituting "systemic risks" for the United States and global economy, and avoiding economic recession is becoming "increasingly challenging" for the United States. The IMF Western Hemisphere economist Andrew Hodge said that the Federal Reserve ’s interest rate hike and government expenditure will slow down consumer expenditure growth. By the beginning of next year, the slowdown in demand will cause the unemployment rate to rise to 5 by the end of 2023 to 5 %about.

Weak consumption has now become a realistic risk. According to Barclays and Bank of America, Americans have reduced credit card consumption in June, indicating that US retail sales are weak. It should be noted that consumer expenditure accounts for about two -thirds of the US economy, and it is the economy of the economy.

Wang Youxin, a senior researcher at the Bank of China Research Institute, analyzed the 21st Century Business Herald that inflation, heating up inflation, and the negative impact of the Fed's interest rate hike on consumption are gradually emerging. The continuous increase in inflation has decreased the actual disposable income, the upper transfer of the interest rate center also increased the cost of consumer liabilities in the United States, and the consumer confidence index continued to decline.

For the future, the consumption of the U.S. economic pillar is constantly slowing down. Will this choke the economy's throat?

People no longer "chop their hands"

In view of the 40 -year high point, the cost of food and energy has soared, the reduction of funds used by American families for other goods and services, and consumer demand is farewell to the peak.

The results of the investigation released by the Fed in New York on July 11 showed that American consumers have reached a record high on inflation expectations in the next year. Specifically, consumers' expectations for inflation in the next year in June reached 6.8%, an increase of 0.2 percentage points from the previous month. It was a record high since the launch of this indicator in June 2013. However, consumers' expectations for inflation in three years will drop from 3.9%to 3.6%, the lowest level since January. Five -year inflation is expected to decrease from 2.9%to 2.8%.

Under the haze of high inflation, the consumption data in the United States in May has actually declined to some extent. According to data released by the US Department of Commerce, the increase in consumer expenditure in May in May decreased to 0.2%, which is the smallest monthly increase this year. After the inflation was adjusted, the personal consumption expenditure in the United States in May actually decreased by 0.4%month -on -month, which was the first time this year.

Zhao Wei, chief economist of Guojin Securities, analyzed the 21st Century Business Herald that from a historical point of view, the American nominal and actual consumption trend was basically the same, but recently have significantly differentiated. The continuous high -level readings in the United States have obviously interfered with the steady relationship between nominal and actual consumption, which led to significant differentiation of the two.

The peak of American consumption since the outbreak of the epidemic has become a cloud of smoke. In Wang Youxin's opinion, the long-term inflation and inflation expectations will curb family consumption expenditure. The actual consumption expenditure of personal consumption in the United States in May was -0.4%month-on-month, which has indicated that consumption has gradually topped.

Although the consumption data in June has not been announced, the indicators have released unfavorable signals. Barclays Economist Pooja Sriram said on the 11th that internal credit card data shows that retail sales in the United States in June may decline by 0.4%, which will be the second month in a row. "American consumers may begin to cut expenditure, which makes us doubt whether the consumption expenditure is about to slow."

Similar to this, Bank of America also warned that the price of gasoline that reached a record high in June is forcing consumers to reduce other expenses. "Credit card data shows that the actual consumer expenditure adjusted by inflation may decline for the second consecutive month."

Economic recession risk increases

From the perspective of various signs, the slowdown in US consumption has become an inevitable event, and the risk of economic recession in the United States is also increasing.

Wang Youxin analyzed that inflation is higher than the trend level for a long time, which will weaken consumers' confidence in the return target level of inflation in the future, which will affect consumer expenditure. From the perspective of consumption structure, considering the high demand of durable goods, in this context, the consumption of durable goods may decrease faster than non -durable goods and service consumption. In May, the amount of durability consumption in the United States decreased by 3.2%month -on -month, instead of continued to grow in durable goods and service consumption expenditures, and the consumption of durable goods was the first to cool down.

In contrast, the consumption of goods is currently undergoing greater pressure, and the relative toughness of service consumption is strong. Zhao Wei said that in the future, service consumption is expected to "pick the beam". As the epidemic once led to the expansion of commodity consumption at a time, the proportion of service consumption accounted for a total consumption of 60.6%, more than 3 percentage points lower than before the epidemic, and there was a lot of room for repair. More importantly, in the background of the US epidemic ebb, whether the consumption of services such as leisure and entertainment, catering, and accommodation can obtain a significant booster in the peak travel season, it will also be an important perspective of testing American consumption. However, it should be noted that the recovery of service consumption demand may bring further release of inflation pressure. In fact, American companies that are in the "front line" have felt the precursor of decline. Craig Jelinek, CEO of Costco, said on the 11th that although the overall consumption situation is good, many American consumers have been trapped on the 11th. Consumers are becoming more cautious, and luxury consumption such as jewelry has begun to slow, and many consumers no longer buy computers and TVs.

It should be noted that "low -income groups are already in a recession. They now only buy gasoline and pay house rent to survive, and wealthy families still have free control income for purchasing goods." Jelinek emphasized.

In addition to the good cities, retailers Wal -Mart and Tajit also pointed out that with the rise in prices, Americans' purchase methods have changed, such as increased expenditures on basic daily necessities such as foods, and non -necessarians such as clothing such as clothing decreased.

As the inflation soaring and eroding family consumption capacity, Allianan chief economist Ludovic Subran vividly described: people have become more and more poor, even if there is no decline at present, it feels like a decline.

The National Economic Research Agency (NBER) defines the decline as "the decline in economic activities in most economic fields for several consecutive months." But from historical experience, the NBER statement usually only appears when it really falls into a recession, or even after recession.

At the official level, data from the US Department of Commerce show that the actual GDP in the United States in the first quarter has shrunk by 1.6%. The U.S. government is expected to announce the official GDP data in the second quarter later this month. If the data is negative, the United States will fall into a "technical recession." In fact, the economy in the second quarter is already at stake. The SP Global Market Intelligence is expected to shrink the US GDP in the second quarter to shrink by 1.5%.

In addition, JPMorgan Chase recently reduced the annualized growth of the GDP in the second quarter of the United States from the previous 2.5%to 1%. Morgan Chase chief American economist Michael Feroli warned: "Our predictions on the US economy are close to the level of recession, which is very dangerous."

Overall, more and more investment banks believe that the United States has recession is a high probability event. The Investment Research Institute of Wells Fargo even said that the United States is now in a decline.

Under the high inflation forced palace, the Federal Reserve has raised interest rates to 150 basis points so far this year. In the future, it will continue to raise interest rates. Consumers are becoming more and more pessimistic about the personal finance and employment market. The double pressure of inflation and interest rates is full of consumers. Come.

Looking forward to the future, Wang Youxin analyzed that considering that the share of US private consumption in GDP is about 70%, consumption is the core engine to promote US economic growth. In 2021 The decline in consumption growth and the reduction of family excess savings, the US economic growth rate will gradually slow down, and the risk of falling into decline will increase.

- END -