Economy

3 Insights From the FED’s Latest Economic Snapshot

Published

1 year ago

June 23, 2022

Marcus Lu

FED economic snapshot June 2022

3 Insights From the Latest U.S. Economic Data

Each month, the Federal Reserve Bank of New York publishes monthly economic snapshots.

To make this report accessible to a wider audience, we’ve identified the three most important takeaways from the report and compiled them into one infographic.

1. Growth figures in Q2 will make or break a recession

Generally speaking, a recession begins when an economy exhibits two consecutive quarters of negative GDP growth. Because U.S. GDP shrank by -1.5% in Q1 2022 (January to March), a lot rests on the Q2 figure (April to June) which should be released on July 28th.

Referencing strong business activity and continued growth in consumer spending, economists predict that U.S. GDP will grow by +2.1% in Q2. This would mark a decisive reversal from Q1, and put an end to recessionary fears for the time being.

Unfortunately, inflation is the top financial concern for Americans, and this is dampening consumer confidence. Shown below, the consumer confidence index reflects the public’s short-term outlook for income, business, and labor conditions.

consumer price index 2005 to 2022

Falling consumer confidence suggests that more people will delay big purchases such as cars, major appliances, and vacations.

2. The COVID-era housing boom could be over

Housing markets have been riding high since the beginning of the COVID-19 pandemic, but this run is likely coming to an end. Here’s a summary of what’s happened since 2020:

Lockdowns in early 2020 created lots of pent-up demand for homes
Greater household savings and record-low mortgage rates pushed demand even further
Supply chain disruptions greatly increased the cost of materials like lumber
Construction of new homes couldn’t keep up, and housing supply fell to historic lows

Today, home prices are at record highs and the cost of borrowing is rapidly rising. For evidence, look no further than the 30-year fixed mortgage rate, which has doubled to more than 6% since the beginning of 2022.

Given these developments, the drop in the number of home sales could be a sign that many Americans are being priced out of the market.

3. Don’t expect groceries to become any cheaper

Inflation has been a hot topic this year, especially with gas prices reaching $5 a gallon. But there’s one category of goods that’s perhaps even more alarming: food.

The following table includes food inflation over the past three years, as the percent change over the past 12 months.

Date	CPI Food Component (%)
2018-02-01	1.4%
2019-05-01	2.0%
2019-06-01	1.9%
2019-07-01	1.8%
2019-08-01	1.7%
2019-09-01	1.8%
2019-10-01	2.1%
2019-11-01	2.0%
2019-12-01	1.8%
2020-01-01	1.8%
2020-02-01	1.8%
2020-03-01	1.9%
2020-04-01	3.5%
2020-05-01	4.0%
2020-06-01	4.5%
2020-07-01	4.1%
2020-08-01	4.1%
2020-09-01	4.0%
2020-10-01	3.9%
2020-11-01	3.7%
2020-12-01	3.9%
2021-01-01	3.8%
2021-02-01	3.6%
2021-03-01	3.5%
2021-04-01	2.4%
2021-05-01	2.1%
2021-06-01	2.4%
2021-07-01	3.4%
2021-08-01	3.7%
2021-09-01	4.6%
2021-10-01	5.3%
2021-11-01	6.1%
2021-12-01	6.3%
2022-01-01	7.0%
2022-02-01	7.9%
2022-03-01	8.8%
2022-04-01	9.4%
2022-05-01	10.1%

From this data, we can see that food inflation really picked up speed in April 2020, jumping to +3.5% from +1.9% in the previous month. This was due to supply chain disruptions and a sudden rebound in global demand.

Fast forward to today, and food inflation is running rampant at 10.1%. A contributing factor is the impending fertilizer shortage, which stems from the Ukraine war. As it turns out, Russia is not only a massive exporter of oil, but wheat and fertilizer as well.

Related Topics:economics US GDP GDP growth Real Estate housing supply Recession inflation cost of living prices housing

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Public Opinion

How Do Chinese Citizens Feel About Other Countries?

What is the Chinese public’s view of world powers? This visual breaks down Chinese sentiment towards other countries.

Published

18 hours ago

July 18, 2023

Avery Koop

Public Opinion: How Chinese Citizens Feel About Other Countries

Tensions over Taiwan, the COVID-19 pandemic, trade, and the war in Ukraine have impacted Chinese sentiment towards other countries.

This visualization uses data from the Center for International Security and Strategy (CISS) at Tsinghua University to rank survey responses from the Chinese public on their attitudes towards countries and regions around the world.

Chinese Sentiment Towards Other Countries in 2023

In the Center’s opinion polls, which surveyed a random sample of more than 2,500 Chinese mainland adults in November 2022, Russia came out significantly ahead.

Just under 60% of respondents held Russia in a favorable view, with 19% seeing the country as “very favorable.” Contrast that to the mere 12% that viewed the U.S. in a positive light.

Here’s a closer look at the data. The percentages refer to the share of respondents that voted for said category.

Country/Region	Very Unfavorable	Somewhat Unfavorable	Neutral	Somewhat Favorable	Very Favorable
🇺🇸 United States	37.4%	21.7%	28.7%	9.2%	3.0%
🇯🇵 Japan	38.4%	19.1%	29.4%	10.7%	2.3%
🇮🇳 India	25.4%	25.2%	41.5%	6.7%	1.3%
🇰🇷 South Korea	17.4%	21.0%	47.6%	11.8%	2.1%
🇪🇺 European Union	9.3%	15.6%	57.6%	14.1%	3.3%
Southeast Asia	7.1%	13.1%	59.5%	16.8%	3.5%
🇷🇺 Russia	3.0%	4.8%	33.7%	39.4%	19.0%

Japan ranked just below the U.S. in terms of overall unfavorability, though a slightly higher share of respondents saw Japan as “very unfavorable” compared to America. This is likely due to both modern tensions in the East China Sea over mutually claimed islands and historical tensions over the Sino-Japanese Wars.

Chinese sentiment towards India was also unfavorable at just over 50%, though notably the country also received the lowest favorability rating at just 8%.

Additional Survey Findings

The survey also found that 39% of Chinese people get their information on international security from Chinese state-run media (mainly through TV), with an additional 19% getting information from government websites and official social accounts. Conversely, only 1.7% get their news from foreign websites and foreign social media, partially due to the Great Firewall.

When asked about different international security issues, the biggest shares of Chinese citizens ranked the following as their top three:

Pandemics (12.9%)
Disputes over territory and territorial waters (12.9%)
China-U.S. relations (12.0%)

The pandemic’s high score reflects the harsher impact COVID-19 had on China. Chinese borders were shut for years and the public faced intense measures to reduce spread.

In terms of other world events, the majority of Chinese people align with a more “Eastern” viewpoint. For example, in regards to the war in Ukraine, the report found that:

“About 80 percent of the respondents believe the U.S. and Western countries should be held most accountable [for the war], while less than ten percent of the respondents argue that Russia is mainly responsible.”– Center for International Security and Strategy, Tsinghua University

Overall, the views of the Chinese public reflect the opposite of those found in many Western countries. They provide an important insight that it is not just the Chinese government holding particular views about the world, but the Chinese public as well.