“America can rejoice because of the rate of inflation”

While the US inflation rate was still 4% a month ago, it is now 3%. “For the first time in a very long time, it’s time to party in the United States,” says economist Edin Mujagic.

podcasting | “America can rejoice because of the rate of inflation”

Core inflation, which excludes fuel and food prices, also fell slightly, but “remains high,” Mujagic said. However, the inflation figures are mainly dominated by the evolution of rental housing prices. “There is a sort of Funda in the United States where an index is kept that shows what is in demand for new rental housing. This index predicts very well what the inflation rate will do,” says the economist.

“No wonder inflation has gone up”

However, this forecast is ahead of the rate of inflation, says Mujagic. “It’s about twelve months ahead of the rate of inflation. Last year it was 16% in the spring, so it’s no wonder that inflation in the US peaked at the end of last year. The current index figure could also give an indication of the future inflation rate, Mujagic expects. “If I look at the Funda-VS index prices, they are now at 5.3%. This means that if crazy things don’t happen in the rest of the economy, inflation will fall even further in the coming months.

Read also | US inflation close to normal

But the influence of other parts of the US economy should not be underestimated. “If you’re an average man or woman in the United States, it’s almost a schizophrenic feeling. If you go to fuel up by car, you will notice that inflation is low. But if you then go to the supermarket to buy food, you notice that inflation is still high. An added benefit for the US citizen are salary increases. “They are higher than inflation, because they are increasing by 4.4%.”