Elevated prices at grocery stores and gas stations are probably souring Americans’ views of the economy. The consumer- price index increased 0.3 percent in April, the biggest advance since June, the Labor Department said last week. Food prices climbed 0.4 percent for a third consecutive month as the cost of meat advanced by the most since November 2003.
Gasoline Prices
While gasoline prices were little changed last week from the prior period at an average $3.65 a gallon, they were up from $3.18 six months earlier. Fuel costs reached $3.70 on April 26, the highest since March 2013.
As prices rise, inflation-adjusted earnings are taking a blow. Real hourly wages fell 0.3 percent in April from a month earlier and declined 0.1 percent from April 2013, the first year-over-year decrease since October 2012.
Further job gains may lay the groundwork for higher wages and confidence. Payrolls climbed by 288,000 workers in April after a 203,000 increase the previous month that was larger than first estimated, the Labor Department said this month.
Today’s figures showed sentiment fell in five of seven income brackets last week, with those making more than $100,000 leading the decline. Sentiment among the highest-earning Americans dropped 3.6 points to 52.9, the lowest level since the week ended Feb. 2. The gauge has declined by 9.4 points in the past month.
Biggest Drop
Among the regions, the South showed the biggest drop in confidence, with a decline of 2.6 points to a one-month low of 35. Sentiment fell in the Northeast and rose in the Midwest and West.
This is the fourth release in which the Bloomberg comfort index has been presented on a scale of zero to 100 rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero. The change is also reflected in the gauge’s components. It doesn’t affect the measures’ relationship to each other or their correlation with other economic indicators. Historical data has been revised and analysis of trends, values and other variables also aren’t affected.