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☆ US consumer price increases slow; underlying inflation sticky
▼ + stars: | 2023-06-13 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

But food prices rose 0.2% after being unchanged for two consecutive months as fruits and vegetables, nonalcoholic beverages and other food products became more expensive. While the unemployment rate rose to a seven-month high of 3.7%, that was from a 53-year low of 3.4% in April. The so-called core CPI increased 0.4% in May, rising by the same margin for the third straight month. Beyond May, however, overall core inflation is expected to slow, driven by a moderation in rents and resumption in price declines for used cars and trucks. "We expect a more noticeable deceleration in core prices in the coming months," said Michael Pugliese, a senior economist with Wells Fargo in New York.

Persons: Kathy Bostjancic, Joe Biden, I've, Biden, nonfarm, Michael Pugliese, Wells, Lucia Mutikani, Chizu Nomiyama, Paul Simao, Andrea Ricci Organizations: Federal Reserve, Labor Department, Fed, Nationwide, Reuters, Treasury, Reuters Graphics, Thomson Locations: WASHINGTON, New York, U.S, Ukraine

☆ The S&P 500 could pop after Tuesday’s consumer price index report, JPMorgan’s trading desk says
▼ + stars: | 2023-06-12 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

The latest reading on the U.S. consumer price index, a widely followed inflation gauge, is slated for release Tuesday at 8:30 a.m. The S & P 500 would pop between 0.75% and 1.25% under this scenario, JPMorgan said. The S & P 500 would trade between breakeven and 0.5% higher under this outcome, the traders predicted. The clear winner here would be the tech sector, JPMorgan traders said. The S & P 500 would drop 2.5% to 3% under this outcome.

Persons: Dow Jones, Buckle, — CNBC's Michael Bloom Organizations: CPI, Federal, JPMorgan, Services Locations: U.S, breakeven

☆ Markets are making a bet that inflation is finally starting to ease
▼ + stars: | 2023-06-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

There is "good news for both inflation and growth," Evercore ISI Chair Ed Hyman said in a client note Tuesday. Fed officials already had been largely discounting shelter prices that they expect to recede through the year. Core services inflation "is likely to slow significantly for the rest of this year and next," Hyman wrote. To be sure, inflation is likely to remain a problem ahead, and Fed officials have stated multiple times that the current level is too high . Both increases "should also be an important reminder to markets and Fed officials," Citigroup economist Andrew Hollenhorst wrote Wednesday.

Persons: bank's, Ed Hyman, Hyman, —, Christopher Waller, Andrew Hollenhorst, Janet Yellen, Yellen, we're Organizations: Federal Reserve, Fed, PMI, Reserve Bank of Australia, Bank of Canada, Citigroup

☆ UK consumers slow spending in May as rising food costs bite
▼ + stars: | 2023-06-05 | by ( Suban Abdulla | ) www.reuters.com time to read: +2 min

The BRC said spending in its members' stores increased 3.9% in annual terms last month, well above the 1.1% fall a year ago. May's retail sales growth was the slowest since the 1.6% recorded in October 2022 when consumers cut back on purchases as inflation soared to a 41-year high of 11.1%. The BRC data is not adjusted for inflation, so May's sales growth reflects a fall in the volume of goods purchased. Food was almost the only area where consumers spent more last month, due to higher prices as well as celebrations to mark the coronation of King Charles. Separate figures from Barclays on Tuesday also showed high inflation and rising food prices continued to eat away at consumers' spending power.

Persons: BRC, King Charles ., Paul Martin, Silvia Ardagna, Suban Abdulla, David Milliken Organizations: British Retail Consortium, Food, KPMG, Bank of England, Barclays, Thomson

☆ Strong US consumer spending, inflation readings put Fed in tough spot
▼ + stars: | 2023-05-26 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Consumer spending jumped 0.8% last month after gaining 0.1% in March. Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, would rise 0.4%. Adjusting for inflation, consumer spending shot up 0.5% after being unchanged in March. Consumer spending is being supported by strong wage gains in a tight labor market. The current pace of consumer spending is, however, unlikely to be sustained as Americans grow weary of inflation.

As the base on which your credit score is calculated, credit reports don't actually include your credit scores. Checking credit score frequently asked questionsWill checking my credit score lower it? Your credit reports do not show when you check your credit score, so the credit scoring algorithms have no way of knowing if you checked your credit score. Similarly to your credit score, checking your credit report doesn't change your credit score. While the average Gen Z consumer has a 679 FICO score, the average member of the Silent Generation has a 760 FICO score.

☆ US annual inflation increase slows to below 5%, price pressures still strong
▼ + stars: | 2023-05-10 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Consumer prices decelerated to 4.9% year-on-year, the 10th straight month of slowdown as prices react to the Fed's rate-tightening cycle. Excluding the volatile food and energy components, the CPI increased 0.4% last month, matching March's gain. Though rents continued to put upward pressure on the core CPI, rental inflation is poised to ease. The government reported last week that the rental vacancy rate increased to a two-year high in the first quarter. In the 12 months through April, the core CPI gained 5.5% after advancing by 5.6% in March.

☆ New York Is Full of Empty Offices After Covid. Make Way for the Playground City. - The New York Times
▼ + stars: | 2023-05-10 | by ( Edward L. Glaeser | Carlo Ratti | ) www.nytimes.com time to read: +20 min

We are witnessing the dawn of a new kind of urban area: the Playground City. The transformation toward the Playground City will not happen on its own. To draw people into the Playground City, we need to show, not tell. 6.Engage citizensGovernments should empower citizens to participate directly in making the Playground City. The Playground City sees people as both a means and an end, and it should involve them in the process of its creation.

☆ Premature for Fed to call end to rate hikes with inflation still high, Williams says
▼ + stars: | 2023-05-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

"We've made incredible progress" in taking action to lower overly high levels of inflation, but "if additional policy firming is appropriate, we'll do that," he said. The central bank also signaled that after just over a year of aggressive rate hikes, it may be done, or close to it, with the rate rises. I do not see in my baseline forecast any reason to cut interest rates this year," Williams said. Williams remains confident the Fed can achieve its objectives, adding "as always, I'll be monitoring the totality of the data and what it implies for the achievement of our goals. But for now, he said price pressures remain "too high," adding that the Fed remains committed to bringing inflation back to its 2% target.

☆ Fed's Williams says inflation still too high, eyeing financial conditions
▼ + stars: | 2023-05-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Williams said price pressures remain "too high," and added that the Fed remains committed to bringing inflation back to the central bank's 2% target. The central bank also signaled that after just over a year of aggressive rate hikes, it may be done, or close to it, with the rate rises. Williams also serves as vice chair of the rate-setting Federal Open Market Committee, which has been working aggressively to lower high levels of inflation. The Fed is eyeing an end to the rate-hike cycle as inflation pressures have eased a bit. He noted there have been signs of slowing price pressures but noted that core services inflation stripped of housing factors remains persistent.

☆ Here are 5 questions that are top of mind for investors as the S&P 500 wavers and the Fed enters its next policy phase
▼ + stars: | 2023-05-09 | by ( Carla Mozée | ) www.businessinsider.com time to read: +6 min

Barclays outlined the top questions investors are asking as the S&P 500 looks stuck in a tight trading range. The S&P 500 is likely to remain rangebound in the short-term, Krishna said. Tail risks aside, markets may be lulled into thinking hurdles - just as the current earnings recession – can be cleared in record time. That scenario tilts the balance of risk toward its base case of a shallow recession base case and an S&P 500 price target of 3,725. The S&P 500 during Tuesday's session was at 4,125.

☆ Consumers are ‘retrenching.’ What that means for recession fears
▼ + stars: | 2023-05-03 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

But for consumers, the lengthy spell in the crossfire of persistently high prices and rising interest rates has taken its toll. Inflation-adjusted consumer spending was flat in March, marking the fourth time in five months that expenditures held steady or declined. “Further deterioration in the job market — the last remaining leg propping up the consumer — is bound to accelerate the downshift in consumer spending in the coming months. Private label growth is one of six indicators that Allison tracks to determine a consumer recession. “If you ask the economists, ‘Are we in a recession?’ they’re going to say ‘No, we’re not in a recession,’” he said.

☆ One firm lists 3 reasons why it thinks the Fed will deliver its final rate hike today, and what that means for the stock market
▼ + stars: | 2023-05-03 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The Fed is poised to hike interest rates today for the last time in the current cycle, according to Fundstrat. That's because inflation has declined, the labor market is softening, and financial stability risks have increased. Stocks have historically performed well after the Fed implemented its last interest rate hike. "The constellation of data is already pointing to a softening of labor market demand, jobs itself and eventually wages. And if inflation continues to decline, that should give the Fed ample breathing room to pause further interest rate hikes.

☆ US consumer spending flattens; core inflation still hot
▼ + stars: | 2023-04-28 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

The unchanged reading in consumer spending last month, reported by the Commerce Department, followed a downwardly revised 0.1% gain in February. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.2% in February. Last month's flat reading in consumer spending set consumption and the overall economy on a lower growth path in the second quarter. Consumer spending is plateauing likely as Americans become more averse to higher prices. The so-called core PCE price index gained 4.6% on a year-on-year basis in March after rising 4.7% in February.

☆ Economists and policymakers were fretting about a wage-price spiral. Not any more
▼ + stars: | 2023-04-21 | by ( Jenni Reid | ) www.cnbc.com time to read: +8 min

The experts were worried about a so-called wage-price spiral. Businesses' revenues "have risen faster than costs, and so margins have room to absorb rising labor costs." "It's not that a wage-price spiral couldn't happen, but it's low on the list of concerns versus the factors we know are problematic," she said. A key mechanism that would fuel a wage-price spiral, workers' bargaining power, has been weakened because unions have less power than in the 1970s, Makszin added. "But if you let interest rates go down against inflation and in effect weaken, you have an inflation spiral.

☆ Here's why Morgan Stanley's top equity strategist is staying bearish on stocks despite the latest rally
▼ + stars: | 2023-04-18 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Morgan Stanley's top equity strategist Mike Wilson is staying bearish on the stock market despite the latest rally. Wilson pointed to the potential for disappointing earnings and a tightening Fed as reasons investors should be cautious. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. He believes revenue growth is going to disappoint investors based on recent soft readings in inflation, which signals a decline in demand. Falling inflation, especially for goods, is a sign of waning demand, and inflation is the one thing holding up revenue growth for many businesses," Wilson warned.

☆ March CPI and the Fed's next steps in its inflation battle: Everything to know
▼ + stars: | 2023-04-12 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Phil Rosen here — March's inflation report is due at 8:30 a.m. "Super core inflation in the CPI report has shown no signs of abating yet," he wrote in a note. Below, I'm breaking down how the world's largest asset manager expects the inflation story to pan out in the long-run. But BlackRock isn't convinced that strength can continue. These three under-the-radar signals suggest that a US recession isn't as close as you might think.

☆ Fed's Williams says interest rate path is data dependent
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +2 min

April 11 (Reuters) - The prospect of the Federal Reserve raising its benchmark interest rate only once more and in a 25 basis point increment is a useful starting point but the central bank's policy path will depend on incoming data, New York Fed President John Williams said on Tuesday. The Fed raised rates by 25 basis points to a 4.75%-5.00% range at that meeting. "We have to be driven by the data," Williams said. Inflation by the Fed's preferred measure is still running at more than twice that target rate. "So the real question to me is, we've gotten to restrictive (on policy), what's it going to take to be sufficiently restrictive?

But with the Fed targeting 2% annual inflation, central bankers will likely be wary about declaring victory too soon. Potentially worrisome to central bank policymakers may be continued pressure in services inflation, excluding housing, a measure that Fed Chair Jerome Powell has said he is watching carefully. That stickiness could prompt the Fed to do more and risk an "overshoot on rate hikes and a deeper, more scarring recession," she said. Traders also were betting more heavily that the Fed would start cutting rates as soon as July, with the policy rate seen reaching the 4.25%-4.50% range by the end of this year, based on interest-rate contract pricing. Fed policymakers earlier this month signaled that most of them expect one more quarter-of-a-percentage-point increase this year and, contrary to market expectations, they don't plan to deliver any interest rate cuts until 2024.

☆ US expected to report strong consumer price increases in February
▼ + stars: | 2023-03-14 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Economists said Tuesday's report remained important for policymakers despite the angst in financial markets. The Consumer Price Index (CPI) likely increased by 0.4% last month after accelerating 0.5% in January, according to a Reuters survey of economists. Food prices are expected to have risen moderately after climbing 0.5% in January. Gasoline prices likely increased, but overall energy prices probably eased slightly because of a decrease in the cost of energy services. With rents remaining hot, services less energy, probably recorded another month of strong price gains after rising 0.5% in January.

☆ Inflation gauge increased 0.4% in February, as expected and up 6% from a year ago
▼ + stars: | 2023-03-14 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Excluding volatile food and energy prices, core CPI increased 0.5% in February and 5.5% on a 12-month basis. The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%, the Labor Department reported Tuesday. Inflation rose in February but was in line with expectations, likely keeping the Federal Reserve on track for another interest rate hike next week despite recent banking industry turmoil. Food prices rose 0.4% and 9.5% respectively. That entails core services inflation minus housing, cohort that increased 0.2% in February and 3.7% from a year ago, according to CNBC calculations.

☆ Supercore inflation: Why the Fed suddenly cares about your barbershop and plumbing bills
▼ + stars: | 2023-03-13 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

Hence, supercore inflation equals the inflation of a basket of goods and services, minus the food and energy inflation, and minus the housing inflation. This ultra-focussed lens is what makes the set of prices in the inflation measure "supercore." supercore inflation, "may be the most important category for understanding the future evolution of core inflation," Fed Chair Jerome Powell said in November. "Traditionally, the Fed focused on core inflation because the components were deemed to be less volatile — and by extension, transitory. Not all economists think supercore inflation is all it's hyped up to beBut not all economists are convinced about the focus on supercore inflation.

☆ New York Fed model finds inflation pressures more persistent than thought
▼ + stars: | 2023-03-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

The new findings out Thursday from the New York Fed add a fresh complication to the monetary policy outlook and could help reinforce the view that aggressive Fed rate hikes have yet to make the needed dent in price pressures. The pickup in inflation in the model has been driven by core goods and core services stripped of housing components. Reuters GraphicsThe New York Fed research shows it's even more problematic than previously estimated. The New York Fed released its report after Powell on Wednesday completed two days of testimony before Congress. In his appearance, Powell acknowledged that inflation pressures had been proving more persistent than he expected in an economy whose overall performance was also stronger than policy makers had thought.

☆ A reading of more than 200,000 jobs added in February would be the Fed's trigger for a big March rate hike, Barclays says
▼ + stars: | 2023-03-08 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

The Fed will likely upsize its March rate hike if the February jobs report shows 200,00 or more jobs added, Barclays said. Investors on Tuesday quickly pushed up the odds the Fed deliver a rate hike of a half-percentage point after downsizing the pace to 25 basis points last month. The February jobs report due Friday is expected to show the world's largest economy added 203,000 jobs, with a steady unemployment rate of 3.4%. The January jobs report trounced expectations with growth of 517,000 jobs. Such moves would put the peak of the Fed's benchmark interest rate at 5.5%-5.75% assuming that after June, the Fed sees sufficient evidence that slowing in employment and wages warrant a pause in rate hikes, Barclays said.

☆ Jerome Powell's testimony is rattling markets. Here's what 4 strategists are saying about the Fed's hawkish stance.
▼ + stars: | 2023-03-07 | by ( Phil Rosen | ) www.businessinsider.com time to read: +4 min

On the first day of testimony to lawmakers, Jerome Powell said the Fed will likely raise rates higher than expected. Traders are pricing in higher odds of a 50 basis-point move this month after Powell's comments. Charlie Ripley, senior investment strategist, Allianz Investment Management"Unsurprisingly, Chairman Powell delivered a message with hawkish undertones in his testimony to Congress. Higher rates and inflation should prove a headwind for P/E expansion, so investors should expect total return to derive from earnings and income." Jeffrey Roach, chief economist, LPL Financial"Rates will likely be higher than expected, but inflation is still the wild card as the Fed remains data-dependent.

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