Tyler Schipper, an economist and associate professor at the College of Arts and Sciences at the University of St. Thomas, spoke to CNN about recent price stressors and the Federal Reserve cutting interest rates.
From the story:
The Federal Reserve cut interest rates on Wednesday for the first time this year, a move that could provide some relief for Americans from the higher cost of living. But there is a deepening inequality among households in the United States.
Consumer spending, which is a crucial part of the U.S. economy, accounting for about two-thirds of its growth remains robust: Sales were up a strong 0.6% in August, a month when spending was expected to be somewhat lackluster. ...
“The business cycle is always super depressing when we think about the different parts of the income distribution, because the lowest decile … in every single recession, they fall further and further behind,” said Tyler Schipper, an associate professor of economics and data analytics at the University of St. Thomas, in St. Paul, Minnesota.
The widening spending inequality is happening at a time when the U.S. economy is slowing, inflation is heating up and the job market is getting shakier.
The rising cost of living was top of mind as Minnesota resident Calyssa Hall and her friend visited the Minnesota State Fair in August. A venture that used to include purchases of artisan-made goods and a selection of different tastes and eats has been whittled down to a couple of food items. ...
To be fair, most state fair items have become much pricier over the past year. According to a price index (the fittingly named On-The-Stick Index) developed by economist Schipper and his University of St. Thomas students, fair prices rose by 7.7% from the year before – more than double overall inflation.
When tracking prices at the Minnesota State Fair this year, Schipper noticed that attendance was below average despite incredibly favorable weather. He attributed that to the fact that “consumer sentiment is lower, and the State Fair tends to be a place where you’re maybe not as cost-conscious.” One way to avoid paying higher prices is that some “just don’t go to the fair at all,” he said.
