Is inflation as high in Europe as in the US?

Is inflation as high in Europe as in the US?

Nobel Prize Winning Economist & Stanford Professor Paul Romer.On Hyperinflation & Protecting Science

US Economy

美国 5 月消费者物价指数预计将按月加速

From statistics published by US Bureau of Labor Statistics, the CPI had an 8.3% year-over-year increase in April, and the government’s CPI report is expected to show inflation accelerated on a month-to-month basis, due in part to gasoline prices. 

However, inflation-adjusted earnings continued to decline for workers, failing 2.6% over the past year due to the surging cost of living. Although the Fed raises rates by half a percentage point to fight inflation, actual data shows that the Fed has a big job ahead. The negative results caused by increasing interest rates should also be considered, it is likely to lead to low consumer confidence and high unemployment. 

European Economy

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Inflation is a global economic problem, which also happens in Europe. 

Companies are facing a critical pressure, measured by the produce price index. Which means the prices of goods immediately post production. The figure presents that the cost of products is continuously increasing with supply disruptions, high raw materials price, and high inflation. Companies would decrease labor cost or increase price to control budget, which would cause less consumers to buy their products. 

The difference between US and Europe

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Active employment rate would stimulate the economy to create more opportunities, but European statistics shows that there is a very low labor-market participation in most European countries, this condition would bring a large uncertainty to the European Central Bank. 

US employers keep hiring; payrolls less than 1 million from pre-pandemic peak

In the US, employers are still hiring while wages gains hold firm. Suggesting the economy continues to power forward as the Fed raises interest rates. One thing we should pay attention to is Coinbase and Tesla’s CEO. Both announced they will need to cut jobs and freeze hiring. Indicating a bad condition of the US employment market. 

Chinese Economy

In conclusion, the National Bureau of Statistics of China reports an inflation rate of 2.1% in April. Which is in a normal range. Because of the dynamic zero-case policy. China locks down Shanghai and Beijing when there are Covid cases. Even if they are the largest two countries in China. Residents are unable to buy products as normal, so the condition in China is different. With the easing of government-mandated quarantine. Lastly, the Chinese government has released a signal to stimulate the economy.

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Is inflation as high in Europe as in the US?