Wonders will never cease. Even Bloomberg has now confessed in writing that “transitory inflation” wasn’t a thing after all:
The steepest inflation in more than 40 years is rattling budgets across the U.S., fueling changes in spending habits and people’s relationships with one another.
About 84% of Americans plan to cut back on spending as a result of higher prices, according to a nationally representative survey conducted by the Harris Poll for Bloomberg News. The biggest cuts involve eating out and impulse purchases, along with driving and experiences like concerts and sports.
…. Although the job market and economy are on solid footing, wage growth isn’t keeping up with prices for everyday items, and consumers are getting pinched from all sides as the Federal Reserve starts raising interest rates.
Of course consumers are cutting back on spending. That’s because their real wages are actually shrinking at a frightful pace. Since the April 2020 peak, in fact, inflation-adjusted hourly earnings in the private sector as a whole are down by 6.0%.