23.7 C
New York
Tuesday, March 14, 2023

Wholesale inflation accelerated in June to 11.3% on rising energy costs

Google Ads
Google Ads

Wholesale inflation rose 11.3% year-on-year in June, another report showing how inflation is becoming entrenched in the economy, the Bureau of Labor Statistics reported on Thursday.

The monthly gain of 1.1% followed a 0.9% increase in May and a 0.4% increase in April. June’s gain beat expectations for a 0.8% gain.

The annual figure is up from 10.9% in May. The core rate, excluding food and energy costs, fell to 6.4% from 6.7%.

More than half of the increase came from gasoline prices, up 18.5%. In contrast, the price of chicken eggs decreased by 32.5% and iron and steel also decreased.

The report after reading the consumer price index on Wednesday showed inflation hitting 9.1% in the 12 months ending in June. This is the highest level since late 1981 and above economists’ forecasts. The producer’s price is usually included in the costs consumers incur when they go shopping.

Political cartoon about economy

Markets were tough ahead of the release with Dow Jones Industrial Average futures dropping more than 400 points. Two pillars of the financial world, JPMorgan Chase and Morgan Stanley, reported second-quarter results on Thursday morning, in which JPMorgan said its profits fell 28% due to provisions for loans. expected losses and Morgan Stanley missed analysts’ estimates due to bad results in their investment banking unit.

The double inflation reports come ahead of the July 26-27 meeting of the Federal Reserve’s monetary policy committee. Markets were pricing in a 75 basis point gain at that meeting, following a similar rally in June, but some analysts say the central move could be even more drastic after the CPI data, possibly 1% increase rate.

“The question has to be asked, especially after the Fed’s surprise move from a clearly announced 50 basis point rate hike to the Fed’s June meeting, has moved significantly to 75 basis points. after last month was higher than expected. The CPI report, is a 1% interest rate option that will be discussed at the Fed meeting this month,” Quincy Krosby, chief equity strategist at LPL Financial, said Wednesday.

“The University of Michigan’s preliminary Consumer Sentiment Index, with its consumer five-year inflation expectations report, is of growing importance,” Krosby said, referring to a report Friday. .

“If consumer expectations for inflation move higher, the possibility of a 1% rate hike will certainly be discussed by Fed members,” he added. “The Fed funds futures market has started the conversation.

Higher prices, coupled with the Fed’s shift to a much more aggressive monetary policy, are hurting businesses large and small. One survey from online payment company Veem found that 49% of small business owners expect a recession this year while 63% of them worry about the financial health of their business.

“Small business owners are feeling the effects of major economic themes in their daily lives as inflation and rising interest rates take center stage,” said Marwan Forzley, CEO of Veem. . “Many entrepreneurs are still struggling to regain their footing after two precarious years and are looking to navigate the challenging landscape for months to come.”

Meanwhile, the number of people filing for unemployment last week rose to 244,000 from 235,000 a week earlier.

The 4-week moving average is at 235,750, up 3,250 from the previous period.

The labor market has been the highlight of the economy for many years, with strong job growth and low unemployment. But it’s unclear if that can continue amid a weakening economy, unadjusted inflation and higher operating costs for businesses.

Read Also
Janaseva News Medium Account

Today’S Fashion News

Bitcoin NEWS



I am passionate about journalism and using new technology to spread news. I am also interested in politics and economics, and I am always looking for ways to make a difference in the world. I am the CEO of Janaseva News, and I am 24 years old.

Related Articles

Google Ads


Please enter your comment!
Please enter your name here

Google Ads
- Advertisement -

Latest Articles

Google Ads

usa news