With such a stark difference between goods and services inflation, the issue is 'Can the Fed do anything about the surge in services prices' ... Can monetary policy limit the rise in medical care or education or tobacco prices Probably not.
More Quotes from Joel Naroff:
Warm weather and consumers' willingness to spend every penny they have led to a huge increase in retail sales. Households may be tapped out and dipping into savings and wealth, but that still hasn't slowed them down one bit.Joel Naroff
The huge rebound in orders shows that, not only did the economy not collapse in June, but it is actually moving ahead at a decent clip,
Joel Naroff
The firming labor market is going to be the key thing that keeps the economy going this year, as the slower housing market will take a lot of the wealth flow away that people used to fund expenditures.
Joel Naroff
They're faced with what is probably a moderation in growth, but a slow acceleration in inflation. The question is, where does inflation go from here I think that will be the driving factor, because I don't think growth is going to stay this slow.
Joel Naroff
Right now, spending is running at a roughly 1.5 percent pace and may not hit 2 percent for the quarter, ... But with income available, it would be surprising if consumption does not pick up.
Joel Naroff
The ... report makes it clear that, without the treats given to us by tax cuts and low interest rates, consumers are on their own, ... Let's just hope they don't trick us and slow spending sharply.
Joel Naroff
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