Inflation reaccelerated in May, rising to 8.6% from a year ago – the fastest increase recorded since December 1981. That’s up from April’s 8.3%. The inflation report, which was worse than feared, caused stock futures to drop Friday morning. “It’s confirming some of the fears I’ve been hearing from investors this week,” said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. In other news, a Federal Reserve report shows that U.S. household wealth declined for the first time in two years.
ABC News/Max Zahn
Inflation rises significantly in May, up to 8.6% year over year
Inflation reaccelerated in May, rising at the highest level seen in four decades, according to data released by the federal government on Friday.
The consumer price index, or CPI, stood at 8.6% year over year in May, a significant increase from 8.3% the month prior, according to the U.S. Bureau of Labor Statistics. That is the largest 12-month increase since the period ending December 1981.
On a monthly basis, the consumer price index rose 1% in May, far outpacing the 0.3% rise seen in April, according to the bureau.
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Dow futures slide 450 points after May inflation report is worse than feared
Stock futures dropped on Friday morning after a highly anticipated inflation report showed a faster-than-expected rise in prices.
Futures tied to the Dow Jones Industrial Average shed 464 points, or 1.5%. Those for the S&P 500 fell 1.4%, while Nasdaq 100 futures sank 1.7%.
The May consumer price index report came in hotter than expected, putting pressure on the stock market. The report showed prices rising 8.6% year over year, and 6% when excluding food and energy prices. Economists surveyed by Dow Jones were expecting year over year increases of 8.3% for the main index and 5.9% for the core index.
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Reuters via U.S. News
U.S. Household Wealth Drops for First Time in 2 Years
U.S. household wealth declined for the first time in two years in the first quarter of 2022 as a drop in the stock market overwhelmed continued gains in home values, a Federal Reserve report on Thursday showed.
Household net worth edged down to $149.3 trillion from a record $149.8 trillion at the end of last year, the Fed’s quarterly snapshot of the national balance sheet showed.
The drop was driven by a $3 trillion fall in the value of corporate equities – a plunge that has worsened in the current quarter – while real estate values climbed another $1.7 trillion.
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