US inflation surges to three-year high, squeezing households and real estate markets
US inflation hits three-year high as Iran war fuels energy price surge, squeezing household budgets and real estate markets
US inflation accelerated to its highest level in three years in April, driven by the Iran war’s impact on energy prices, according to data from the Federal Reserve’s preferred gauge, the Personal Consumption Expenditures (PCE) Price Index. The core PCE, which excludes volatile food and energy costs, rose 0.2% month-on-month but ticked up to 3.3% year-on-year—the fastest pace since 2023—underscoring persistent price pressures even as the energy shock eases slightly. Fed Governor Lisa Cook warned Wednesday that "inflation is clearly moving in the wrong direction" .
The inflationary squeeze is eroding household finances, with Americans spending faster than their incomes grow. Real per capita disposable income—adjusted for taxes and inflation—fell 1.4% year-on-year in April, marking the first consecutive negative readings since late 2023. The personal saving rate plummeted to 2.6%, the lowest since mid-2022, as consumers dip into savings to cover rising costs, particularly for gasoline and energy goods. "Rising prices, sluggish income, and economic uncertainty could set the stage for a broader pullback in consumer spending," said NerdWallet economist Elizabeth Renter .
The European Central Bank’s chief economist, Philip Lane, warned that the energy shock from the Iran conflict will likely have a "persistent" impact on inflation, even if the war ends quickly. "The disruption to global energy markets is structural, not temporary," Lane said, signaling prolonged pressure on prices across the eurozone .
Real estate markets under strain In Austria, soaring prices and stagnant wages have made homeownership increasingly unattainable for average earners. A study by *Der Standard* found that single-family homes are unaffordable in 41 of 105 districts, with the crisis most acute in western regions like Tyrol and Vorarlberg. Only eastern states such as Lower Austria and Burgenland remain relatively accessible, revealing a stark west-east divide in housing affordability . A separate analysis by *Die Presse* confirmed the trend, noting that young buyers face the steepest barriers in urban and alpine areas, where prices outpace wage growth by double-digit margins .
In Romania, economist Adrian Negrescu warned of a "stagflationary spiral" that could erase 75,000 jobs by year-end, further depressing real estate demand. "We’ve cut our own branch," Negrescu said, citing a toxic mix of stagnant investment, accelerating poverty, and inflation that outpaces wage growth. The country’s unemployment rate edged down to 3.24% in April, but the labor market’s resilience masks underlying fragility, with corporate service revenues still 14.9% below 2025 levels .
Central banks brace for prolonged shock The Bank of Canada reported that domestic lenders are "well placed" to weather a prolonged energy-price shock, though the central bank cautioned that sustained inflation could tighten credit conditions. In the US, Fitch Ratings warned that consumer spending is increasingly reliant on wealthier households, creating a "K-shaped" recovery that leaves lower-income groups vulnerable to further price shocks .
With energy costs now the primary driver of global inflation, economists expect central banks to maintain restrictive monetary policies longer than previously anticipated. The ECB’s Lane hinted at a "higher-for-longer" interest rate stance, while the Fed’s next moves will hinge on whether core inflation resumes its downward trend—or succumbs to fresh energy-driven spikes.
Articles
Canada Lenders Well Placed to Handle Prolonged Energy-Price Shock, Central Bank Says Canadas banks have fortified their financial position over the past year and would be able to lend to customers should the war in Iran escalate and lead to a prolonged period of higher energy prices, a Bank of Canada report said.
wsj · about 3 hours ago
In welchen Bezirken sich Durchschnittsverdienende noch ein Haus leisten können In 41 von 105 Bezirken in Österreich ist ein Einfamilienhaus bereits unleistbar. Vor allem in Niederösterreich und im Burgenland gibt es aber noch günstige Regionen
der standard · about 3 hours ago
Americans are spending faster than their income is growing Data: Bureau of Economic Analysis; Chart: Axios VisualsAmericans are burning through their financial cushion at an accelerating pace, spending faster than their income is growing, as the energy shock from the Iran war slams household budgets.Why it matters: Consumer spending has indeed held up, defying rock-bottom sentiment readings. But theres new evidence that suggests households are increasingly drawing down savings to support their spending, a fragile dynamic for the broader economy.What theyre saying: "While prices are rising faster than comfortable, incomes are not, putting consumers in an uncomfortable spot," NerdWallet senior economist Elizabeth Renter wrote. "Rising prices, sluggish income and economic uncertainty could set the stage for a broader pullback in consumer spending and therefore economic growth," Renter added.By the numbers: The personal saving rate fell to 2.6 in April, down from 3.2 in March and 4.3 in January — a sharp slide that brings it to its lowest level since mid-2022.Consumer spending rose 0.5, even as disposable personal income fell 0.1, the Commerce Department said Thursday morning.That gap between how fast consumer incomes are rising and how quickly they are spending is driving the drawdown in the saving rate. Gasoline and energy goods were the single-largest driver of spending increases in April, one sign of how the wars energy impact is registering in household budgets. Zoom in: The Personal Consumption Expenditures Price Index, the Federal Reserves preferred inflation gauge, rose 0.4 in April, cooling from 0.7 in March at the height of the energy shock.There is still little evidence of the shock spilling over into non-energy-related categories. Core PCE, which excludes food and energy costs, gained 0.2 — cooling slightly from March.Still, compared with the prior year, core PCE ticked up to 3.3, its highest level since 2023. As Fed governor Lisa Cook put it in a speech Wednesday: "Inflation is clearly moving in the wrong direction."Between the lines: Before the pandemic, Americans were saving at roughly double todays rate, though that cushion has been eroded by two consecutive inflation shocks in the span of four years.The personal saving rate can send very different messages about the health of the consumer and the broader economy. During the 2008 financial crisis, the saving rate climbed above 8 as households retrenched and hoarded cash. A high rate in that case was a sign of fear, not necessarily financial health.A low rate can signal the opposite: confidence in future income and a willingness to spend. But the makeup of Aprils spending increase — led by gasoline and energy goods, not discretionary purchases — undercuts that optimistic read. Data: U.S. Bureau of Economic Analysis; Chart: Matt Phillips/AxiosThe intrigue, via Axios Matt Phillips: Real per capita disposable income — the money consumers can spend after accounting for taxes and inflation — declined 1.4 in April from a year ago. It also dropped 0.4 in March.These are the first consecutive negative year-over-year readings since late 2023. Some analysts have found that real disposable income can be a powerful predictor of election results, with increases boosting incumbents and declines helping lift challengers.The bottom line: "Aggregate spending is still being supported by the wealth effect and the upper end of the K-shaped economy, but that support is doing more of the heavy lifting — making the overall spending backdrop look increasingly uneven and fragile," wrote Olu Sonola, Fitch Ratings head of U.S. economics.
axios · about 3 hours ago
Schimbare de paradigmă în topul economiilor globale. Elveția pierde supremația. Care este noua cea mai scumpă țară din lume Pentru prima dată în opt ani, Elveția și-a pierdut statutul de cea mai scumpă țară din lume. În 2026, Islanda a devenit lider în ceea ce privește nivelul prețurilor, depășind Elveția cu trei puncte procentuale, relatează Bloomberg.
adevarul · about 4 hours ago
„Jocurile foamei. Un economist estimează că 75.000 de locuri de muncă ar putea dispărea până la finalul anului: „Ne-am tăiat singuri craca Economistul Adrian Negrescu avertizează că România traversează „cea mai gravă situație economică posibilă, caracterizată de stagflație, lipsă de investiții și o populație care se confruntă cu o sărăcire accelerată.
adevarul · about 5 hours ago
US core PCE inflation continues to rise Higher inflation in April is due to energy, tariffs and AI-related spending
financial times · about 5 hours ago
Cifra de afaceri din serviciile pentru companii a crescut cu 14,9 în martie, dar rămâne sub nivelul de anul trecut Cifra de afaceri din serviciile de piață prestate în principal întreprinderilor a crescut în martie 2026 cu 14,9 față de luna precedentă, însă comparativ cu aceeași perioadă a anului trecut continuă să se afle pe un trend negativ, potrivit datelor publicate joi de Institutul Național de Statistică (INS).
digi24 · about 5 hours ago
Rata șomajului a scăzut la 3,24 în aprilie. Peste 259.000 de persoane figurau în evidențele ANOFM Rata șomajului înregistrat la nivel național a fost de 3,24 la sfârșitul lunii aprilie 2026, în scădere cu 0,01 puncte procentuale față de luna martie și față de aceeași perioadă a anului trecut, potrivit datelor publicate joi de Agenția Națională pentru Ocuparea Forței de Muncă (ANOFM).
digi24 · about 5 hours ago
USA: Krieg mit Iran treibt Inflation auf Drei-Jahres-Hoch Die Inflation in den USA hat sich im April wegen des Kriegs und steigender Energiepreise beschleunigt.
sueddeutsche · about 5 hours ago
Wirtschaft und Verteilung: Die Löhne steigen deutlich – die Sozialausgaben noch stärker Die Löhne der Arbeitnehmer steigen um mehr als vier Prozent und damit stärker als die Preise. Noch stärker wachsen die Sozialausgaben – was auch an steigender Arbeitslosigkeit liegt.
faz · about 6 hours ago
Studie: Können sich Junge Immobilien noch leisten? [premium] Laut Durchblicker ist der Hauskauf in Österreich regional sehr unterschiedlich leistbar. Während er im Westen für viele Menschen kaum mehr finanzierbar ist, bleibt er im Osten und Süden teils noch erreichbar. Es zeigt sich ein klares West-Ost-Gefälle.
die presse · about 6 hours ago
Economistul-şef al BCE: Războiul din Iran va avea un impact persistent asupra inflaţiei Şocul energetic provocat de conflictul din Orientul Mijlociu va avea, probabil, un impact persistent asupra inflaţiei, chiar dacă va fi găsită o soluţie rapidă la război, prognozează economistul-şef al Băncii Centrale Europene (BCE), Philip Lane.
digi24 · about 6 hours ago