As the Federal Reserve takes into account March’s jobs figures in their inflation path for 2024, how confident are Americans in the strength of the US economy?
BofA Securities Head of US Economics Michael Gapen joins Market Domination to discuss the state of US consumer sentiment around inflation as the Fed carefully navigates its monetary policy in a major election year.
On why certain aspects of the labor market such as wage growth haven’t found their way to all corners of the US economy, Gapen says:
"I think maybe why it hasn’t percolated through to consumers, there’s a number of reasons. But I think one is simply the difference between the price level in the rate of inflation. When people like me talk about it, ‘Oh, inflation is slowing,’ that doesn’t mean the price level is falling. It just means it’s rising at a slower rate. So, I think households are still adjusting to what has been a big level shift upward in the price level over the past few years."
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