Inflation hits middle-age, middle-income

A detailed analysis of who is being hit hardest by inflation – the middle-income, middle-aged workers.

https://wellsfargo.bluematrix.com/links2/html/ce81895f-c1ef-…

At the same time, our indices are likely to understate the experienced inflation of lower-income households relative to measured inflation from the CPI this past year. Rent is the largest category for spending across the two lowest income quintiles, while owned housing is the largest category for the three highest. Although the CPI for owner’s equivalent rent has risen 3.8% over the past 12 months, the vast majority of mortgage payments are fixed, meaning owners’ actual costs have not changed. What’s more, homeowners have been able to build equity in this environment of fast-rising home prices. Renters, on the other hand, face more frequent adjustments, with prices typically changing with each new lease. The methods in which the CPI measures rented and owned shelter also tend to both delay and understate how changes in market prices feed through to official inflation measures.5 Market-based measures show rent increasing substantially faster this past year than indicated by the CPI. [end quote]

Wendy

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At the same time, our indices are likely to understate

Wendy,

One way of looking at this report and the “shaped” data is that it was written for a clientele. For whatever reason Wells is thinking the middle class middle aged banking consumer wants to hear inflation is regarded in a certain light by Wells.

Would Wells ever write an econ report just to report an unbiased truth. Sure, but this is not it.

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