Some key data surrounding inflation was released Thursday morning. Here are some key takeaways: According to the data, consumer prices jumped 5% in May – a pace experts say was last seen 13 years ago. It also showed that the consumer price index rose 5% from a year ago. CNBC reports economists surveyed by Dow Jones were expecting a gain of 4.7%. Another gauge that excludes volatile food and energy prices increased 3.8%, the fastest pace since May 1992.
Consumer prices jump 5% in May, fastest pace since the summer of 2008
Consumer prices for May accelerated at their fastest pace in nearly 13 years as inflation pressures continued to build in the U.S. economy, the Labor Department reported Thursday.
The consumer price index, which represents a basket including food, energy, groceries, housing costs and sales across a spectrum of goods, rose 5% from a year ago. Economists surveyed by Dow Jones had been expecting a gain of 4.7%.
The reading represented the biggest CPI gain since the 5.3% increase in August 2008, just before the worst of the financial crisis sent the U.S. spiraling into the worst recession it had seen since the Great Depression.
Though the inflation readings are well above anything seen since the financial crisis, the Federal Reserve has been largely dismissive of the numbers. Central bank officials believe the current rise is due to temporary factors that will abate as the year goes on and look higher because of comparisons to the year-ago period when much of the economic activity remained restricted due to pandemic precautions.
Consequently, market participants generally do not expect to see the Fed react to the latest numbers when the policymaking Federal Open Market Committee meets next week.
Read the full story, here.
Kitco News/Jim Wyckoff
Some price pressure on gold amid hotter U.S. inflation data
Gold prices are lower in early morning U.S. trading Thursday, hitting daily lows following a U.S. inflation report whose numbers were higher than expected, which in turn pushed U.S. Treasury yields up a bit. However, gold and silver prices have since rebounded well up from their daily lows. Some more profit taking from the shorter-term futures traders is featured this morning. August gold futures were last down $6.00 at $1,888.20 and July Comex silver was last up $0.013 at $28.01 an ounce.
The U.S. economic data point of the week saw the consumer price index report for May come in at up 0.6%, which was a big higher than the 0.5% rise expected. Year-on-year the CPI rose to 5.0% in May versus April’s rise of 4.7%. Today’s report falls into the camp of those who think inflation could get too hot in the coming months. On a near-term basis, the gold and silver traders are placing more emphasis on the uptick in bond yields after the CPI report, and less on the bullish implications of rising inflation down the road.
The weekly U.S. jobless claims report showed a drop in claims in the latest period, which was also deemed a bit negative for the safe-haven metals.
Global stock markets were mixed overnight, with European shares mostly flat and Asian shares mostly firmer. U.S. stock indexes are pointed toward mixed to weaker openings when the New York day session begins. The global marketplace remains calm at present, amid no major geopolitical flareups in play and some typical summertime-doldrums trading occurring.
Keep reading, here.
What investors should listen for during Fed Chair Powell’s address
JP Morgan Funds chief global strategist David Kelly shares insight on market movement amid federal reserve forecasting.
Watch the full interview, here.