The United States is experiencing an inflation situation that has not been seen since the 1980s.
The United States' September inflation data showed that after deducting the volatile energy and food prices, the U.S. core CPI (consumer price index) rose 6.6% year-on-year in September. From the absolute value, the United States has not experienced such severe inflation in 40 years, which set the largest increase since the oil crisis in 1982.
On November 8, the United States will hold a midterm election. Whether the Democrats can maintain their advantage in the Senate and House of Representatives also seems to have become unpredictable due to severe inflation. A poll released by the Center for American Political Studies at Harvard University in October showed that 58% of people have no confidence in the ability of the Biden administration to control inflation, which Americans consider the most important.
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United States CPI index chart from January 2021 to September 2022.
Inflation is high and does not decline
"In the field of economics, when talking about the horror of inflation, the first thing is inflation itself, the price level continues to rise, the currency continues to depreciate, affecting social stability; the second thing is inflation expectations . When people believe that prices will continue to rise in the future, people will buy more products to hoard, enterprises will reduce supply or pass on costs, and the intensified contradiction between supply and demand will drive prices to rise substantially. This is also the most worrying thing for decision makers in major developed countries, including the United States - now inflation expectations are slowly realizing, and inflation may enter a vicious cycle." Assistant researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, Ma Wei, told the reporter of " China Report ".
The United States takes 2% PCE (Personal Consumption Expenditure Decrease) value as the inflation control target. Ma Wei said that PCE is similar to CPI, but the adjustment frequency is a little higher than CPI. "If the index stabilizes at 2%-3%, the situation will be basically controllable. If it rises to 5%-6% or even higher, it will basically be out of control."
Since the second quarter of last year, the US PCE indicator has been rising all the way, and this year's value has continued to stabilize at a high of more than 5%. "The US economy has indeed fallen into an inflation quagmire," said Ma Wei.
Residents in many cities in the United States are suffering from high prices. Zhu Zhu (pseudonym), who lives in the third largest city in the United States, found that when he visited the supermarket in June this year, he found that the price tags of all products have been rewritten, and the price has been increased by about 10%. "In the past, the price of eggs worth four or five dollars increased to $7," Zhu Zhu said. Qi Yue (pseudonym), who lives in Pennsylvania, spends 20 to 30 dollars per month more than the previous two years: "In 2020, the cheapest oil I have ever added to Tennessee was $1.49 per gallon, and now Pennsylvania has risen to $3.99 per gallon. Some time ago, it was even more outrageous, $4.59 per gallon, which doubled directly."
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On November 12, customers refueled at a gas station in New York, USA.
Ma Wei introduced that observing this round of US inflation, you can start from two aspects, one is overall inflation and the other is core inflation. Overall inflation mainly includes two categories: goods and service prices, and price changes are mostly observed from consumer data such as CPI and PCE. Core inflation means that the index after removing the large price fluctuations of projects such as food and energy can more accurately capture the price change trend.
"Analyzing data in recent months found that food and energy prices have basically stabilized. What is really rising is core inflation, that is, the prices of service industries such as air tickets, hotels and catering have begun to rise. It is equivalent to this round of inflation in the United States achieving a relay from commodity price-driven to service price-driven." Ma Wei said.
A Chinese who runs a restaurant in Connecticut, USA said that the price increase in the catering industry is helpless: "I can't hold on anymore. The seafood purchase price is three times that of before the epidemic. We only increased by 15%, which has almost squeezed out the original profit . We raised the price not to make money, but to survive."
The United States tightened the faucet
In order to cope with the severe domestic inflation situation, the Federal Reserve urgently launched interest rate hikes in in March, raising the base point of borrowing interest rates , and curbing the flow of funds in the domestic market. In March and May, the Fed raised interest rates by 25 and 50 basis points respectively (one basis point equals 0.01%).
“还是晚了”，受访专家均表示。 "The Fed starts the process of hikes too late. Even a quarter earlier, the situation will not be so bad now." Chen Dafei, chief economist of Oriental Securities' wealth management business headquarters, told China Reporting reporters.
6月，美国CPI数值达全年高点9.1%，美联储加大加息力度，6月、7月、9月连续三次分别加息75个基点，为1994年来的最大幅度加息。目前美联储利率维持在3.00%—3.25%。
△ Feder Chairman Powell
Feder Chairman Jerome Powell said at a press conference in June that the Fed will firmly commit to letting inflation fall. The pace of interest rate hikes depends on future economic data. It is hoped that interest rate hikes can be raised to a restrictive level of 3.0%-3.5% by the end of 2022.
但多位美联储官员近期释出鹰派信号，美联储加息不会停止，2022年将至少还有一次75基点的加息。 Inflation in the United States has far exceeded its original expectations.受访专家均表示，美联储加息可能要抬至4.5%，甚至5%以上才会停止。
“美联储加息对全球影响才是最大的。”马伟认为。陈达飞也指出，美联储的地位相当于全球的中央银行，它的加息进度对全球大部分国家及利率敏感部门的宏观流动，都起到收缩作用。
在8月16日，美国总统拜登签署了《通胀削减法案》，意在通过减少财政赤字、增加对大企业征税等措施来遏制通胀。不过该法案名不副实，与通胀并不直接相关，对美国通胀和经济增长的正面影响有限，可能还将加大清洁能源领域的全球竞争。
9月，日元兑美元跌破150日元关口，创32年新低；英镑兑美元贬值达20%。美联储加息已引发多国货币汇率震荡。
"These are still the case in developed countries, and the situation in and emerging economies of are even worse. Their economies are not yet slowing down, but after the United States unilaterally tightened the faucet, on the one hand, the local currency depreciated , and domestic capital accelerated its outflow in order to maintain value. On the other hand, countries like Sri Lanka have high foreign debts and are all calculated in US dollars. After the depreciation of the local currency, the debt pressure suddenly increased, and foreign exchange reserves are on the verge of exhaustion." Ma Wei said.
triple drive relay
The United States has actually seen inflationary momentum since the second quarter of last year. The core PCE in April 2021 rose from 1.8% in March to 3.1%, but the United States insisted at the time that inflation was temporary and believed that it could be controlled soon.事实证明，此次通胀与上世纪80年代地缘政治主导的石油危机相比，情况更为复杂，驱动因素也在不断发生变化。
马伟认为，从表现来看，美国从去年开始的通胀经历了三轮驱动因素的变化。
最开始通胀主要受供应链中断影响。 2021年初全球疫情不确定性高，美国尚未解封，国际和国内运输都面临较大困难，供应链危机导致商品价格上涨。 “比如美国很多卡车司机担心感染新冠，便选择自动退出劳动力市场。”马伟说。
developed until the outbreak of the Russian-Ukrainian conflict in early 2022, and the rise in food and energy prices drove the second round of inflation. Ma Wei analyzed that the United States is different from EU inflation. The EU mainly has high energy and food prices, but the United States can achieve energy self-sufficiency and is a food exporter. After Biden announced the release of oil reserves in June, food and energy prices were controlled to a certain extent
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On August 10, customers shopped in a supermarket in Millbray, California, USA.美国劳工部当日公布数据显示，7月美国消费者价格指数环比持平，同比上涨8.5%。
所以6月份及至现在，俄乌冲突已不是影响美国通胀的主要因素。在剔除掉食品和能源价格后，美国的核心CPI指数持续上涨，通胀由商品价格转由服务业价格驱动。
“现阶段服务业价格上涨，主要指向美国过热的劳动力市场。”马伟说。美国劳工部数据显示，美国9月失业率从8月的3.7%降至3.5%，是自20世纪60年代以来的最低水平。同时，9月新增就业岗位26.3万个，劳动力持续短缺。
陈达飞分析，美国目前劳动力市场的供给还是远远不足，整体供小于求。朗普时代强硬的驱逐移民、新冠大流行带来约200—400万人丧失劳动能力等因素，共同导向现在美国劳动力供给的削减。
“目前美国就业市场约有300余万个供给缺口，弥合这个缺口，至少要到明年。”陈达飞说。同时，马伟介绍，服务业价格不同于商品价格，服务业价格粘性很大，不太容易短时间内降下来，比如房租、工资等，都是以月、季度或年度计算，价格调整速度慢，此轮通胀降温面临更大考验。
Inflation inflection point is approaching, and soft landing is difficult
△ On July 4, in front of the US Embassy in Tianjin in the capital of Zimbabwe, members of the Zimbabwe "Broad Opposition Sanctions Alliance" organized a protest to oppose the long-term economic sanctions of the United States and its Western allies on Zimbabwe.
通胀过境后，一场全球性的经济衰退似乎不可避免。
马伟认为，美国现在抑制通胀的唯一有效措施就是大幅加息。 "Because the Fed had too slow to start interest rate hikes before, it now has to overcorrect it. Only by making the market believe that the Fed will not give up until it hits inflation can it fully control the investment enthusiasm of enterprises, the confidence of workers, and the people's judgment of their consumption capacity." Ma Wei said.
空前加息力度下，陈达飞认为核心通胀的拐点应该在今年四季度或明年一季度出现。马伟则认为时间可能更长，“到明年年中，通胀或许才能有所缓解。”
与此同时，加息的副作用正在显现，二级市场持续下挫。 "The current situation in the financial market reflects about 4%. The valuations of many listed companies have been reduced, but their profits have not yet bottomed out. If the Federal Reserve is consistent with the forecast this year and raises interest rates to 4.75%, the stock market will fall another wave," said Chen Dafei.
此外，美国经济的降温也将伴随失业率的提升。 "The Federal Reserve certainly hopes that the decline in the employment gap will be filled by the unemployed. But if the economy drops in the future, companies may have to dismiss existing workers to reduce employment demand. It is estimated that the unemployment rate in the United States will reach more than 5%, the consumption investment indicators will drop, and the US economy may enter a substantial recession," said Ma Wei. A report released by the World Bank in September pointed out that more than two-thirds of the world have implemented tightening monetary and fiscal policies, and central banks in various countries have raised interest rates one after another. The highly synchronized tightening policies may lead to a global economic recession in 2023 and trigger economic crises in emerging markets and developing countries.
美国通胀压力下，全球经济能否实现“软着陆”？陈达飞预计，明年的全球经济增速，即使不是负增长，也是非常低的。马伟也认为，美联储想要在经济温和增长的状态下控制通胀是比较困难的。
陈达飞进一步预测，明年全球所有经济体从上到下都将从收缩滑向衰退。 The United States and Europe have begun this process this year. Countries such as India and Vietnam now look good in economic growth data, mainly due to their most backward recovery cycle, and these emerging economies will enter the early stages of contraction to recession next year.
反观中国，在全球通胀压力下，中国经济第二季度增速低于预期，复苏动能较弱，与美国经济高温并不一致。
马伟指出，中国经济政策有相当高的独立性，人民币贬值总体可控，中国整体的通胀压力不大，没有必要跟进加息。 “甚至我们还有通缩的压力，整体消费不足。"Chen Dafei also believes that China has a relatively systematic manufacturing industry, and production capacity is still acceptable. At this stage, it is mainly focused on the problem of insufficient demand.
written by: Intern reporter of "China Report" Li Shimeng
Picture source: Xinhuanet
Editor: Xu Hao
