{"id":122218,"date":"2021-10-01T21:48:37","date_gmt":"2021-10-01T21:48:37","guid":{"rendered":"https:\/\/fin2me.com\/?p=122218"},"modified":"2021-10-01T21:48:37","modified_gmt":"2021-10-01T21:48:37","slug":"supply-chain-snafus-touch-every-corner-of-the-economy","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/supply-chain-snafus-touch-every-corner-of-the-economy\/","title":{"rendered":"Supply chain snafus touch every corner of the economy"},"content":{"rendered":"<p><cite>New York (CNN Business)<\/cite>A key measure of inflation hit a new 30-year high in August, the Bureau of Economic Analysis reported Friday.<\/p>\n<p>The price index tracking consumer spending &#8212; the PCE price index &#8212; was up 4.3% over the 12 months ending in August. That was a faster pace than July&#8217;s 4.2%. Inflation continued to run at the fastest pace since January 1991.<br \/>\nStripping out food and energy prices, which tend to be volatile, the inflation measure stood at 3.6%, where it has been since June. It remains the fastest rate of so-called core inflation since March 1991 and well above the Federal Reserve&#8217;s target of 2%.<\/p>\n<ul><\/ul>\n<p>The PCE inflation gauge is one of many, and they&#8217;re not all pointing in the same direction: The consumer price inflation index came off a 13-year high in August, for example. But the PCE index is the Federal Reserve&#8217;s preferred measure of inflation.<\/p>\n<ul><\/ul>\n<p>The continued surge in PCE inflation has led the Fed to signal that it will begin to wind down its emergency economic stimulus &#8212; even though the US economic recovery has shown signs of a slowdown in recent months.<\/p>\n<h3>Pay raises and price hikes<\/h3>\n<p>Although prices rose sharply, American incomes increased at only a modest pace, up 0.2% or $35.5 billion from the pior month in August. Disposable income was up by even less &#8212; just 0.1% or $18.8 billion.<br \/>\nThese increases were partly due to higher wages as companies are trying to attract and retain workers while a shortage of labor is weighing on many businesses. In government benefits, the advance Child Tax Credit payments under the American Rescue Plan helped add to incomes. Friday&#8217;s report does not yet reflect the end to the enhanced pandemic unemployment benefits, which rolled off at the start of September.<br \/>\nAnd yet Americans kept going out to spend their cash. Consumer spending rose 0.8% or $130.5 billion between July and August, split pretty evenly between good and services.<br \/>\n&#8220;Households still have plenty left in the tank given rising employment and wages, soaring net worth (as home prices reach for the sky), and massive excess savings,&#8221; said BMO Senior Economist Sal Guatieri in a note to clients. &#8220;However, rising prices are eating into spending power,&#8221; he added.<br \/>\nConsumers remain the backbone of the US economy. If inflation got so high that people would rather save their money than spend it, America&#8217;s economy would be in a really tight spot.<br \/>\nThat said, the rate of savings has soared during the pandemic. In August, it stood at 9.4%.<br \/>\nGiven the ongoing threat of new Covid-19 infections through the Delta variant and the colder months with fewer outdoor activities looming, people&#8217;s services spending could get curtailed.<br \/>\nBut for now consumers are feeling okay.<br \/>\nThe University of Michigan&#8217;s consumer sentiment index for September beat expectations on Friday and rose from the Delta-driven slump in August.<\/p>\n<ul><\/ul>\n<p>Richard Curtin, the chief economist behind the survey, called it &#8220;depressed optimism,&#8221; adding that Americans have begun to postpone purchases due to high prices.<br \/>\n&#8220;Even if transient, higher inflation has already decreased living standards,&#8221; he said.<br \/>\nSource: <a href=\"https:\/\/edition.cnn.com\/2021\/10\/01\/economy\/inflation-incomes-august\/index.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (CNN Business)A key measure of inflation hit a new 30-year high in August, the Bureau of Economic Analysis reported Friday. The price index [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":122217,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Supply chain snafus touch every corner of the economy - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/supply-chain-snafus-touch-every-corner-of-the-economy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Supply chain snafus touch every corner of the economy - Fin2me\" \/>\n<meta property=\"og:description\" content=\"New York (CNN Business)A key measure of inflation hit a new 30-year high in August, the Bureau of Economic Analysis reported Friday. 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