US inflation hit 40-year high in June

Record gas prices

Inflation surged to a new pandemic-era peak in June, with US consumer prices jumping by 9.1% year-over-year, according to fresh data released  by the Bureau of Labor Statistics. That’s the highest level in more than 40 years and higher than the previous reading, when prices rose by 8.6% for the year ended in May. It is also much higher than the 8.8% that economists had predicted, according to Refinitiv.

The Consumer Price Index for June also showed that overall prices that consumers pay for a variety of goods and services rose by 1.3% from May to June. Much of the June increase was driven by a jump in gasoline prices, which were up nearly 60% over the year. Americans faced record-high gas prices last month, with the national average topping $5 a gallon across the country. Electricity and natural gas prices also rose, by 13.7% and 38.4%, respectively, for the 12-month period ended in June. Overall, energy prices rose by 41.6% year-over- year.

https://edition.cnn.com/

Equities bounce back

Yields, oil prices drop

Wall Street closed higher on Tuesday as investors waited for inflation data and worried about the prospects of slowing economic growth and the impact of policy tightening.

itcoin

U.S. Treasuries rallied, with the yield on the benchmark 10-year note tumbling from a more than three-year high to below 3% as investors reassessed the inflation outlook before U.S. consumer price index (CPI) data is released Wednesday.

U.S. crude oil futures dipped below $100 a barrel to their lowest level in two weeks as the demand outlook was clouded by coronavirus lockdowns in China and growing recession concerns, while a strong dollar made crude more expensive for buyers using other currencies.

Markets have been volatile across asset classes due to a combination of surging inflation and fears that monetary tightening aimed at slowing price increases would cause a slowdown in global economic growth.

https://www.cnbc.com

Inflation hit a fresh 39-year high in December

Consumer prices jump 7% in 2021

Another month, another record-setting leap in prices.

Inflation hit a fresh 39-year high in December as a drop in energy costs wasn’t enough to offset a steady march upward for staples such as food, rent and cars amid stubborn supply-chain bottlenecks and worker shortages.

The consumer price index jumped 7% last year, the fastest pace since 1982, the Labor Department said Wednesday. That’s up from 6.8% annually in November, which was also a nearly four-decade high. COVID-19’s fast-spreading omicron variant likely intensified the price increases by spawning more worker absences in global delivery networks and slowing shipments, says Wells Fargo economist Sam Bullard. That more than erased any easing of demand and prices in COVID-19-sensitive industries like travel, Bullard says.

https://eu.usatoday.com/

Omicron variant and inflation, 2 concerns of the week

This week, investors are set to focus on updates on the Omicron variant and inflation. Concerns around both of these factors had stirred up volatility across markets last week.  The two are intertwined. Many have feared that an additional wave of the coronavirus could spur another slowdown in consumer mobility and spending that hits economic activity and corporate earnings. Vaccine-makers and other researchers have yet to determine the extent of Omicron’s transmissibility and severity of illness caused by the variant, or whether it is at least partially resistant to current vaccines.

And yet despite these virus-related fears, monetary policymakers have signaled they are ready to pull back on monetary policy stimulus that had helped support the economy for more than a year-and-a-half during the pandemic. That’s come as inflationary trends have proven stickier than previously expected, given tighter monetary policies could help ease elevated prices.

Investors are set to receive an updated look at the state of inflation later this week, with the Labor Department releasing its November Consumer Price Index (CPI) on Friday. Though the Federal Reserve has typically looked to the core personal consumption expenditures (PCE) index as its preferred gauge of inflation, the CPI has served as another critical datapoint underscoring the extent of price increases impacting Main Street consumers.

https://finance.yahoo.com/

The Consumer Price Index for April rose 4.2%

Stocks already lower

Red-hot consumer inflation data for April spooked markets and raised concerns that the Fed is wrong about rising prices being just temporary. If the Fed is incorrect, that means that it could begin to unwind its easy policies quicker than expected and ultimately raise interest rates.

The Consumer Price Index for April rose 4.2% from a year ago, the briskest pace since September 2008. Economists had expected a big number, of 3.6%, because of base effects accounting for last year’s weakness. But the CPI’s surge took markets by surprise, sending Treasury yields higher and stocks lower.

The CPI measures a basket of goods and energy and housing costs. Excluding food and energy, core CPI increased by 3% year over year and 0.9% on a monthly basis, compared with respective estimates of 2.3% and 0.3%. Stocks, already lower, buckled under the inflation worry when the Labor Department released its report at 8:30 a.m. ET Wednesday. Tech slumped and the losses on the Nasdaq accelerated. The index was down 2% in afternoon trading, while the S&P 500 was off 1.6%.

https://www.cnbc.com/