Despite the higher import duties, inflation in the United States in May has increased weaker than expected. However, economists do not yet give everything -clear because the customs shock can be felt later.
In April, US President Trump announced high special rates for import from dozens of countries, which he later partially suspended. However, a basic customs set of ten percent remained. “So far there is little to see about the customs shock in the price data,” said economist Bastian Hepperle of Hauck Aufhäuser Lampe Lamp Privatbank AG. Perhaps an inflation wave can build up slowly for a few months. “Custom price increases must therefore be more visible in the summer,” said Hepperle.
From April to May the prices were slightly weaker than expected by 0.1 percent: the decrease was mainly because gasoline became cheaper. Consumer prices rose by 2.4 percent compared to the previous year, as the Ministry of Labor announced on Wednesday in Washington. In April, inflation had still fallen to 2.3 percent.
“The development of American consumer prizes remains a mystery,” said economist Elmar Völker of the Landesbank Baden-Württemberg (LBBW). “Even in May there was no trace of the effects of the enormous habits for Donald Trump.” And this despite the fact that the American companies in surveys emphasized that they want to pass on the price increases to consumers. “It is only to start that the retailers still sell the previously filled shares,” said Völker.
Inflation too high and labor market too robust
Despite the calls of the White House after an interest reduction, the independent US central bank recently stopped and left the main interest in the reach of 4.25 to 4.50 percent. According to her boss Jerome Powell, the central bank wants to get more clarity about how the political change under Trump will influence inflation and the labor market. The next interest decision will be on June 18. However, many experts do not expect any interest in September.
“The bottom line is that inflation is too high and the labor market is too robust to reduce interest in the coming week,” said the chief economist at the Hamburg Commercial Bank, Cyrus de la Rubia. Given that the wage decisions are still in an increase in inflation, interest behavior would only be conceivable this year if there is still a recession.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
