Inflation Rate Spikes As Retail Workers Quit And Chairman

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Inflation Rate Spikes As Retail Workers Quit And Chairman Powell Deflects



Wow, talk about a retail double-whammy headache that turned miserable! First the workers quit and then the May PCE (personal consumption expenditure) index hit its biggest inflationary increase in 29 years!

The Department of Commerce released their PCE numbers Friday morning and the index hit 3.4% (excluding food and energy) after rising 3.1% in April. Clearly, from the trending index, inflation is at hand - but is it “transitory” as the government says? Federal Reserve Chairman Jerome Powell told a Congressional oversight committee that inflation was running higher than anticipated, but it will prove to be temporary. Chairman Powell said that “a pretty substantial part (or perhaps all of the overshoot in inflation) comes from categories that are directly affected by the reopening of the economy.” สล็อต ฝาก-ถอน true wallet

When the surging PCE increase was announced, the stock market was probably concerned for about a minute - before it reacted with a yawn. The tepid market response was largely because the inflation number was “anticipated” and the month-to-month increase was not so bad. However, within all the delivered data, they did seem to quietly overlook that consumer spending was flat in May - and that personal income has also declined by 2%. These important numbers remain of concern for retailers, especially when they see a slow down of spending in a rising economy - with new inbound inventory arriving to catch anticipated sales.

The double-whammy headache began when consumers started rolling into retail’s front door - while workers started aggressively rolling out the back. The Labor Department released their April turnover numbers on June 8th and the actual number of “QUITS” in the retail sector topped the “job loser list” with a huge percentage increase. All totaled, about 4 million people quit in April and (of them) 649,000 were employed in retail, which was the largest number for the sector in about 20 years.

Thinking back a few months, wasn’t the Paycheck Protection Program (PPP) supposed to preserve retail jobs during COVID? Now, with reasonable abatement at hand – workers are leaving on their own. Some employees have said that they were challenged by dealing with customers, or simply too stressed to continue; while others left their jobs to seek new opportunities because they felt it was time to self-graduate from the retail environment. The troubling punch-line for this issue - is that retail is considered a “bell-weather” industry and one that should be leading America’s recovery from the pandemic. However, the data indicates that retail is still 419,000 jobs behind the (more-normal) April 2019 levels and that is of concern. Some blame the extra unemployment benefits that are considered to be overly generous. But, perhaps in an awkward degree of confirmation, the N.Y. Times commissioned an online research survey that actually showed 52% of those polled wanted the extra benefits to end immediately.

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