Citi exec on impact of inflation outpacing wage growth
Citi’s Institutional Client Group Chairman Leon Kalvaria argues that while ‘we’ve had big wage increases,’ the U.S. economy has faced price hikes for everything from food to energy, which is a ‘highly regressive tax.’
Citi's Institutional Client Group Chairman Leon Kalvaria noted on Wednesday that "people are worried about a recession" as inflation outpaces wage growth.
Speaking on "Mornings with Maria," he noted that "a recession, at the end of the day, comes from the consumer side of the equation."
A recession refers to a contraction in gross domestic product (GDP) activity, the broadest measure of goods and services produced across the economy, for two consecutive quarters.
Late last month, the Commerce Department revealed in its first reading of the data that GDP fell at a 1.4% annualized rate in the three-month period from January through March, as snarled supply chains, record-high inflation and labor shortages weighed on growth and slowed the pandemic recovery.
Harvard economist on ‘shocking’ contraction of US economy in Q1
Harvard University professor Kenneth Rogoff, a former chief economist at the International Monetary Fund, tells ‘Mornings with Maria’ that GDP falling at a 1.4% annualized rate is ‘even below the worst’ he thought it might have been.
The Labor Department revealed earlier this month that average hourly earnings rose by 5.5% year-over-year in March, down slightly from 5.6% the month before. The data comes amid surging inflation, which sits near 40-year highs.