Main Topic: U.S. inflation and the Federal Reserve's efforts to control it.
Key Points:
1. U.S. inflation has declined for 12 straight months, but consumer prices increased 3% year-on-year in June.
2. The Federal Reserve aims to reduce inflation to about 2% and plans to raise its key federal funds rate to over 5%.
3. The Fed is concerned about high inflation due to a strong labor market, rising wages, and increased consumer spending, and aims to slow the job market to control inflation.
Main Topic: China's inflation data for July
Key Points:
1. Consumer price index (CPI) fell by 0.3% in July from a year ago, but was up by 0.2% compared to June.
2. Producer price index (PPI) fell by 4.4% in July from a year ago, better than the decline in June.
3. Both CPI and PPI are in deflation territory, indicating weakening economic momentum and lacklustre domestic demand.
### Summary
Former Toys "R" Us CEO Gerald Storch warned that the economy is likely to face a difficult holiday season due to persistent inflation. Other economic stresses such as rising interest rates, credit card debt, and student loans are also contributing to consumer difficulties.
### Facts
- Inflation remains sticky despite the Inflation Reduction Act that was passed a year ago.
- Sales of physical products have been declining for 11 consecutive months when adjusted for inflation.
- The July consumer price index (CPI) rose 0.2%, with prices climbing 3.2% from the same time last year.
- Pulte Capital CEO Bill Pulte suggests that the economy is in a period of stagflation with low growth and high inflation.
- Shelter costs, accounting for 40% of the core inflation increase, rose 0.4% for the month and are up 7.7% over the past year.
- Americans are spending $709 more per month on everyday goods and services compared to two years ago.
- Consumers are shifting towards value retailers in response to inflation.
- President Biden acknowledges that the Inflation Reduction Act was not solely aimed at reducing inflation but rather focused on generating economic growth.
### Summary
Inflation rates would be significantly lower if the "owner equivalent rent" component was removed from the consumer price index, according to an opinion piece.
### Facts
- Removing the "owner equivalent rent" (OER) component from the consumer price index (CPI) would result in a lower year-over-year inflation rate of about 1.5%, compared to the current rate of 3.2%.
- The personal-consumption expenditures price index (PCE) would also see a decline in the inflation rate, from 3% to approximately 2.2%.
- The author suggests that the inclusion of OER in these indexes causes inflation to be overstated.
- These findings indicate that inflation has fallen more than what current flawed price indexes suggest.
US inflation remains above 3% as the cost of goods and services rose by 0.2% in July, prompting speculation that the Federal Reserve may freeze interest rates to manage inflation without causing a recession.
Consumer prices in the eurozone rose 5.3% on average this month compared to last year, with core inflation easing to 5.3%, potentially increasing pressure on the European Central Bank to raise interest rates.
Inflation has decreased significantly in recent months, but the role of the Federal Reserve in this decline is questionable as there is little evidence to suggest that higher interest rates led to lower prices and curtailed demand or employment. Other factors such as falling energy prices and the healing of disrupted supply chains appear to have had a larger impact on slowing inflation.
Americans are expecting high inflation to persist over the next few years, with a median expectation of 3.6% one year from now and estimates of around 3% three years from now, according to a survey by the Federal Reserve Bank of New York. This suggests that sticky inflation may continue to be a concern, as it surpasses the Fed's 2% target. Consumers also anticipate price increases in necessities such as rent, gasoline, medical costs, and food, as well as college tuition and home prices.
Investors and the Federal Reserve will have to wait for inflation to return to acceptable levels, as the Consumer Price Index report for August 2023 shows consumer prices rising at half the pace compared to a year ago, despite a jump in gas prices.
Goldman Sachs predicts that the August consumer price index (CPI) will show a 3.58% annual increase, with a decline in used car prices, higher airfares and transportation prices, and stable shelter inflation.
The latest inflation report is expected to show a steady increase in consumer prices, with economists predicting a 3.6% overall inflation compared to last year, indicating that inflation is gradually coming down but still remains above the Federal Reserve's target.
The release of the US Consumer Price Index (CPI) for August is expected to impact the crypto market, particularly Bitcoin, depending on overall financial market volatility and whether core CPI surprises to the upside or downside.
U.S. consumer prices are expected to have increased the most in 14 months in August due to rising gasoline costs, while underlying inflation is forecasted to remain moderate, potentially prompting the Federal Reserve to keep interest rates steady.
Despite a spike in gas prices, the rise in inflation appears to be easing gradually, with core prices exhibiting a slower increase in August compared to July, suggesting that price pressures are being brought under control.
Gas and housing prices continue to rise, leading to a 0.6% increase in the federal consumer price index for August and a 3.7% increase for the year, causing concerns about overall inflation and its impact on household budgets.
Inflation is expected to fall below the Federal Reserve's 2% target by late next year, despite a recent rise in consumer prices driven by increased energy costs.
Despite claims by the Biden administration and corporate media that inflation is decreasing, the latest consumer price index from the Bureau of Labor Statistics shows that Americans paid 3.7 percent more for basic consumer items in August compared to the previous year.
Cryptocurrency prices remained stable as inflation in the U.S. surpassed economists' expectations, with Bitcoin trading at around $26,100 and Ethereum experiencing a slight dip of 0.5%. The Federal Reserve will consider this report, among other factors, for its upcoming interest rate announcement on September 20. While inflation has decreased since June, it still exceeds the Fed's target of 2% annually. Core inflation, excluding volatile food and energy costs, decreased to 4.3% in August compared to July's 4.7%.
Inflation in the US accelerated for the second consecutive month in August due to rising costs of rent and gasoline, with the consumer price index rising 0.6% from the previous month and 3.7% from the same time last year.
Wholesale inflation in the US rose more than expected in August, with the producer price index increasing by 0.7%, the largest monthly gain since June 2022, counteracting recent data that suggested price increases had been slowing down.
August inflation rose to 3.7%, the highest month-to-month increase since June 2022, driven by rising gas prices, which accounted for over half of the rise, while prices for shelter and food remained elevated; however, the Federal Reserve's reaction to the data is uncertain as there are signs of prices moderating but also concerns over inflation remaining too high.
The Consumer Price Index (CPI) for this month shows that core CPI and all items CPI were slightly above expectations and accelerating, with the primary contributors to the acceleration being core services ex housing and energy, which may be a concern for the Fed. Additionally, owner's equivalent rent was a significant positive contributor to the monthly change in CPI, while used cars and trucks had a negative impact. There is potential for a re-acceleration of inflation, which could have negative implications for equity markets.
Consumers' inflation expectations have reached the lowest level since March 2021, with expectations of a 3.1% rise in prices over the next year, according to new data from the University of Michigan, signaling a positive sentiment for the Federal Reserve's fight against inflation.
Despite elevated inflation, the Federal Reserve is not expected to lower interest rates soon, causing the Consumer Price Index to rise significantly and impacting mortgage rates and home prices.
Health insurance inflation is difficult to measure due to the variations in quality and benefits among different policies, but the Bureau of Labor Statistics indirectly calculates it based on health insurers' profits, which will result in a rise in health insurance prices in the Consumer Price Index (CPI) starting in October 2022, potentially impacting inflation rates and Federal Reserve decisions on interest rates.
Inflation in the UK fell to 6.7% in August, the lowest level in a year-and-a-half, driven by slower food price increases and a drop in hotel and air fare costs, although fuel prices rose; economists had expected the figure to increase due to rising fuel prices.
The overall inflation rate in most European countries dropped to its lowest level since before the start of the war in Ukraine, despite climbing oil prices, with consumer prices in the eurozone rising at an annual rate of 4.3 percent in September, down from 5.2 percent in August, according to the European Commission's statistical arm.
The Federal Reserve's preferred measure of inflation decreased in August, indicating that efforts to combat inflation are progressing, although there are still price growth pressures that could lead to further interest rate hikes by the central bank.
The Federal Reserve's preferred inflation indicator, the personal consumption expenditures price index excluding food and energy, rose less than expected in August, suggesting progress in the central bank's fight against higher prices.
Consumer spending in the US increased by 0.4% in August, while core inflation fell below 4.0% for the first time in over two years, potentially reducing the likelihood of an interest rate hike by the Federal Reserve.
The Reserve Bank of India (RBI) expects consumer price index (CPI) inflation to ease below 4 percent in fiscal 2024-25 if there are no further shocks and a normal monsoon, with the central bank rethinking rate cuts only if CPI inflation remains at or below 4 percent on a durable basis.
The September CPI report is expected to show that inflation remains above the Fed's target, increasing the likelihood of a rate hike and raising inflation expectations for 2023, potentially leading to further upside risk to rates from Treasury auctions.
The upcoming Consumer Price Index (CPI) report for September is expected to show cooling core inflation despite a rise in headline inflation, with the Federal Reserve closely monitoring the data to assess whether inflation is moving closer to its 2% annual goal.
The Consumer Price Index (CPI) report for September 2023 is expected to show a slow increase in prices, with market expectations forecasting a 0.3% increase in core inflation on a monthly basis and 4.1% on a yearly basis, which may lead to stronger market reactions if the figures exceed expectations. Banks such as Morgan Stanley, Goldman Sachs, and Bank of America have provided their predictions for the upcoming CPI report. Analysts suggest that if the core CPI exceeds 0.1% on a monthly basis, it could lead to a decline in the stock market as it may indicate a potential interest rate hike by the Federal Reserve. This data is particularly significant as it precedes the FOMC meeting scheduled for October 31-November 1.
The U.S. government's upcoming inflation report is expected to show a cooling off of inflation, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, and core inflation expected to be up 4.1% from September last year, indicating slower price increases in September than in August.
The upcoming monthly inflation report is expected to show that inflation in the US is cooling off, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, indicating slower price increases in September than in August. However, if the report reveals that inflation remained higher than expected, especially in core areas, it may prompt the Federal Reserve to raise interest rates again, further slowing the economy.
U.S. consumer prices rose in September due to surging rental costs, but underlying inflation pressures remained moderate, suggesting that the Federal Reserve is unlikely to raise interest rates next month.
The Consumer Price Index (CPI) report for September 2023 shows that while core goods experienced deflation, core services, particularly housing, continued to rise, indicating mixed results for the U.S. economy and leaving the Federal Reserve cautious about any policy changes.
Consumer prices in the US rose by 0.4% in September, slightly surpassing expectations, with the consumer price index (CPI) rising by 3.7% compared to the previous year, higher than the estimated 3.6%.
