Analyses of US main street economic indicators. - Part 9

Let's take a look at some recent economic data again.

The 1-year inflation expectation has started to go down to around 6% but the 3-year inflation expectation is rising towards 4% whilst the 5-year inflation expectation is relatively stable.

Why is the 1-year inflation expectation falling?  We believe that the fall is due to the easing in supply disruption as shown in the turnaround in the logistics sector.

The shipping capacity had increased which meant that the freight rates would be lowered.

The number of container ships waiting at the ports had declined which meant that the cargo backlog had eased.

The high US inflation had caused consumer sentiment to fall quite significantly as shown below.

The real spending rose because of the high prices but the actual consumption had declined to 6.3%.

The core personal consumption expenditure (PCE) had also fallen which showed that the consumers had cut back on their spending across the board and the cutbacks were not specifically targeted.

The decline in PCE will also cause PMI to fall accordingly as the producers are less inclined to produce in anticipation of weaker demand ahead.  As such, the GDP will also be affected negatively.

The overall economic picture is still very bleak in the eyes of financial experts.  Here are their prognoses.