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‘Shrinkflation’ takes hold across the U.S. economy

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Amid the backdrop of a flourishing U.S. economy, characterised by rising stock prices, job growth, and falling inflation rates, a peculiar phenomenon is troubling many Americans: “shrinkflation.”

This term refers to the practice of maintaining product prices while reducing the quantity or quality of the item, and it is becoming increasingly prevalent in various sectors, both online and offline.

However, the Consumer Price Index fails to account for this subtle shift in the economic landscape.

Shrinkflation is not limited to just the grocery aisle – it has permeated nearly every facet of consumer life.

Less value

While Americans may still be paying similar prices as they did a year ago, they often receive less value for their money.

One example of this can be seen in airline fares, which the Labor Department’s consumer-price index reported as having fallen by 9.4% in 2023.

However, this seemingly positive figure masks a more complex reality.

The calculation heavily relies on the “lowest available fare,” typically offered by budget airlines.

These airlines often require passengers to pay extra fees for services that were previously included in the ticket price, such as carry-on baggage and seat selection.

More for services

Consequently, flyers find themselves with less legroom and even face additional charges for beverages or snacks.

While some may appreciate the flexibility of differentiated pricing, many consumers are disheartened by paying more for services they once received as part of the base ticket cost.

Enjoying these “low” fares may be short-lived, as airline labor costs are on the rise due to newly negotiated pilot union contracts. Even low-cost carriers, traditionally known for their budget-friendly offerings, are grappling with financial losses.

In this new environment of normalized interest rates, businesses are compelled to prioritize profitability, inevitably leading to higher prices for consumers.

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Money

Anticipation builds for US jobs data and it’s global impact

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What to expect on. a global scale as investors brace for key U.S. employment figures.

Investors and economists are eagerly awaiting the release of the latest US jobs data, anticipating its potential impact on global market trends.

The numbers are expected to provide crucial insights into the health of the world’s largest economy and may influence investment decisions and market sentiments worldwide.

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Money

ASX 200 – what are the key market impacts from reporting season?

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What have investors learned as ASX 200 wraps up reporting season?

As the ASX 200 reporting season draws to a close, market participants are analyzing the outcomes and drawing key insights.

From notable earnings reports to unforeseen challenges, the conclusion of this reporting season unveils critical information that will shape investment.

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Money

AI pushes the Nasdaq to a record-breaking close

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The Nasdaq achieved a record-breaking close, surpassing its previous record high of 16,057.44, which was established on November 21, 2021.

Artificial assistance

Artificial intelligence-related technology stocks, such as Nvidia (NVDA.O) and Microsoft (MSFT.O), have greatly boosted the index.

The Nasdaq Composite has increased by almost 7.2% this year.

The tech-focused index surged 43% in 2023, and as chipmakers gained traction and confidence increased that the Fed might achieve a soft landing—that is, curb inflation without inciting a recession—stocks surged strongly by year-end.

In contrast, Nvidia increased by 1.9% on Thursday, bringing its total gain from a year ago to around 250%.

Market boom

Every S&P 500 subs sector saw a gain at the end of the month.

Analysts at Deutsche Bank report that the index has now increased for 16 of the past 18 weeks, matching the record most winning weeks last attained in 1971.

Bitcoin also moved closer to its all-time high.

The price of the virtual currency momentarily surpassed $64,000 as spot bitcoin ETFs helped drive it to heights last seen in 2021.

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