Photo: ASHRAF SHAZLY / AFP / Getty Images
Despite the fact that last March monthly inflation reached one of the highest levels in 05 years, in the United States, consumer spending also rose more than expected. As a way to cushion the rise in prices and to be able to pay for consumer items, several buyers have resorted to their savings.
Consumer spending, which represents more than two-thirds of the country’s economic activity, rose 1.1% in the third month of the year. This was reflected in an increase in spending on services, of 1.1%; and spending on goods, 1.2%, said the Department of Commerce.
Economists consulted by Reuters estimated that despite an increase in spending of consumers calculated at 0.7%, inflation-adjusted consumer spending increased 0.2% in March. This would reflect the consumer’s ability to cope with the current inflationary context.
Given the successive increase in prices, and the contraction of the economy in the first months of the year, analysts dissipate for the moment, the fears of a recession due to that consumer spending has not decreased.
However, major banks on Wall Street, such as Deutsche Bank have increased their forecasts and reaffirmed that a recession is looming in the country by the end of 2013 and early 2024, which will exceed 5% unemployment. For its part, Goldman Sachs predicted that there are 35% chance of having a recession in the next two years.
In addition to this, the gross domestic product contracted at an annualized rate of 1.4% in the most recent report from the Office of Economic Analysis, of the Department of Commerce.
The Federal Reserve (Fed) is expected to raise interest rates in 50 points next Wednesday, above the quarter point announced in March.
You may be interested in:
-Why the IMF fears for humanity and the world economy as the Russia-Ukraine war progresses
1930573589086532387-President of the World Bank warns that inflation in the face of the war in Ukraine could bring a “human catastrophe”
1930573589086532387-How the rise in interest rates proposed by the Federal Reserve affects the pocket of Americans