Inflation

Today's rising inflation is tied directly to the rising cost of oil, gas and coal, which account for 79 per cent of all energy spending.

It also rocked a system rattled by the volatility of extreme and difficult resources such as fracked oil and bitumen. Those who did not believe in business as usual left before the Germans arrived, sailed to Russia or America or joined the resistance. Putin’s destructive war against the Ukrainian people has disrupted global oil and gas supplies guaranteeing high oil prices for years to come. Even if the global fleet of internal combustion vehicles (about 1.5 billion) were to stop growing, “decarbonizing 50 per cent of it by 2030 would require that we manufacture about 600 million new electric passenger vehicles in nine years — that’s about 66 million a year, more than the total global production of all cars in 2019. Now they propose to “electrify the Titantic” as ecologist William Ophuls puts it, at a time of expensive fossil fuels, indebted financial systems and mineral shortages. It means returning to standards of living prevalent in the 1960s and 1950s. In addition, the electricity to run those cars would have to come from zero-carbon sources. Neither side recognizes that today’s inflation is but a harbinger of the unravelling of our complex, interdependent, globalized economy as fossil fuels become more expensive and in key ways irreplaceable by so-called renewables. “The goal of industrial-scale transition away from fossil fuels into non-fossil fuel systems is a much larger task than current thinking allows for. As a consequence energy price volatility began to rock the globalization project. Yes, fossil fuels still drive the global economy despite ubiquitous headlines on the progress of a green energy transition that promises endless “clean” growth. This supposed debate avoids unpleasant realities such as rising global consumption and growing rates of energy use in a finite world.

Investors and economists had expected to see some moderation in inflation. Instead, prices accelerated again in May, delivering an unwanted surprise.

Mr. Biden and his team have been trying to make a delicate pivot on the inflation issue, calling it his top economic priority and increasingly expressing sympathy for the households struggling to cope with rising prices. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys. The data have refused to cooperate, and price spikes continue to hammer American families. There is no room to sugar coat this,” analysts at TD Securities wrote in a report shortly after the release. The “1970s called and it wants its inflation back. The Consumer Price Index data showed mounting evidence that the war in Ukraine was continuing to push the prices of food, gasoline, electric power and other staples higher.

Full coverage of the markets and U.S. consumer-price index for May.

Prices for used cars and trucks rose 1.8% in May from April, reversing three months of declines. May’s increase was driven by sharp rises in the prices for energy, which rose 34.6% from a year earlier, and groceries, which jumped 11.9% on the year. The Labor Department on Friday said that the consumer-price index increased 8.6% in May from the same month a year ago, marking its fastest pace since December 1981.

The latest Consumer Price Index showed a re-acceleration in inflation, dashing hopes that price increases had peaked.

The World Bank expects the rate of global consumer price inflation to drop below 3 percent next year. By contrast, the organization partly blamed inflation in the United States on “ over-buoyant demand,” which is more responsive to tighter monetary policy. The question — and big uncertainty — is how much Fed action will be needed to bring inflation under control. Data from the index is also used to come up with the P.C.E. figures. Rents are climbing swiftly as Americans compete for a limited supply of apartments, restaurant bills are heading higher as food and labor costs rise, and airline tickets and hotel rooms cost more because people are eager to travel and because inputs like fuel and labor are more expensive. At the same time, the war in Ukraine is cutting into the world’s supply of food and fuel, pushing overall inflation higher and feeding into the cost of other products and services. Travelers can save more than $100 each on the cost of a domestic flight and hotel stay if they plan trips in late August rather than in June or July. The price of gasoline rose 4.1 percent in May over the previous month, bringing the increase from a year ago to 48.7 percent. The central bank is expected to raise its benchmark rate by half a percentage point next week, and then again in July. Polls consistently show voters rate inflation as the country’s top economic problem and expect it to worsen. Friday’s release of Consumer Price Index data from the Labor Department contradicted, at least for a month, some of the administration’s more optimistic predictions. Fed officials are watching for signs that inflation is cooling on a monthly basis as they try to guide price increases back down to their goal, but Friday’s report offered more reason for worry than comfort.

Economists like to strip food and energy out of their inflation calculations. They're too volatile to be meaningful, they say. But for everyday Americans ...

This all comes at a time when housing prices are also surging, up the most since 1991 as of April. Shelter costs lag other CPI categories because of how the government tracks the data, so the category could increase further in the second half, adding to household strain. Some 31% of households found it somewhat or very difficult to pay for usual household expenses, according to a Census Bureau survey conducted in late April and early May, compared with 25% at the same time last year. In the past, any stretch of high inflation in a single category would likely be isolated and pass in a few months’ time, he said. Some economists had been predicting that March was the “peak” for US inflation this cycle as annual price increases for consumer discretionary items like furniture, apparel and appliances have started to come off the boil. And data out Friday are likely to show a further surge in those unavoidable areas of spending. Economists like to strip food and energy out of their inflation calculations.

The latest data on consumer prices in the United States showed that annual inflation unexpectedly rose to a 40-year high in May, underscoring concerns about ...

The ratio of household net worth to disposable income remained near its record high and continues to be far above its pre-pandemic level in 2019. The move would allow the ride-hailing giant to return to app stores in mainland China, almost a year after Didi was removed over data privacy violations. About 58% of Americans own stock, according to Gallup. hit a record high in May for the fourth consecutive month. Remember: Earlier this week, The Wall Street Journal reported that Beijing's cybersecurity review of Didi was about to wrap up. In early 2022, it was a contributor to rising inflation alongside food and energy. The positive developments come after the world's second largest economy was battered by widespread Covid lockdowns, a sweeping crackdown on tech companies and a real estate slump. The big question for policymakers and Wall Street is whether inflation has peaked. That could complicate "peak inflation" hopes. But what happens in the interim remains murky. The decline in equities was partially offset by a $1.7 trillion increase in the value of real estate and a continued high rate of personal saving. of the value of the basket of goods and services that the US Bureau of Labor Statistics uses to track consumer prices, which gives it significant weight in the overall inflation picture.

Consumers are watching their pennies at the gas station and grocery store as consumer prices surged 8.6% in May, pushing the annual inflation rate to its ...

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US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy.

Rent of primary of residence climbed 5.2% from a year earlier, the most since 1987. Rising demand for travel and entertainment this summer, particularly among wealthier households who have the savings to support discretionary spending, as well as tight labor market conditions will likely maintain upward pressure on services inflation in the coming months. Energy prices climbed 34.6% from a year earlier, the most since 2005, including a nearly 49% jump in gasoline costs. Furniture, including bedding, was one of the few categories to post a monthly decline. That will likely keep the Fed on a trajectory of 50-basis-point hikes beyond July, even though the economy is cooling.” US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. There are growing risks that price pressures in those categories will continue to build. That raises the risk of a recession, which some economists already saw as likely next year. “There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. In May, prices for necessities continued to rise at double-digit paces. Two-year Treasury yields jumped, stocks opened lower and the dollar rose. Shelter, food and gas were the largest contributors.

The U.S. inflation rate reached 8.6 percent in May, its highest level in more than 40 years, putting pressure on employers to raise wages to keep pace.

"It is very unusual to see so many companies planning a second round of adjustments," said Rebecca Toman, vice president of the survey business unit at Pearl Meyer. "Normally, budgets are set well in advance for an annual rise. Also, if the first 10 days of June are anything to go by, the next monthly measure would be higher." "Yet, these organizations will find themselves at a significant strategic and operational disadvantage if demand continues as anticipated—especially as other employers offer higher base pay salaries." A May survey of 337 U.S. companies by pay consultancy Pearl Myer found that about one-third of organizations are considering or planning to provide midyear salary increases in 2022: The May CPI measure came in higher than consensus expectations that the annual rate would stay unchanged at 8.3 percent, indicating that "signs of inflation peaking in April were wrong," according to The Kobeissi Letter, an industry commentary on global capital markets. The U.S. inflation rate reached 8.6 percent in May, its highest level since December 1981, the U.S. Department of Labor (DOL) reported on June 10, putting pressure on employers to raise wages to keep pace.

The Consumer Price Index for all products rose 1% in May from the month prior, driven by rising prices of food, gasoline and shelter.

"The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output. "Even as we continue our work to defend freedom in Ukraine, we must do more — and quickly — to get prices down here in the United States." "My Administration will continue to do everything we can to lower prices for the American people," Biden said. "The deficit has come down more under my watch as President than at any time in history, but if Congress would pass tax reform to make the wealthiest Americans and big corporations pay their fair share, we could reduce this inflationary pressure even more," he urged. Goods prices are expected to fall in the coming months. Lower-income and Black and Hispanic Americans, in particular, are struggling because, on average, a larger proportion of their income is consumed by necessities.

At last, interest rates for money market funds have started to rise. But inflation means that in real terms, you're still losing money.

They can extend the duration of their holdings so that yields lag the decline in money market yields by up to two months. The yields paid by money market funds at the moment are below those of Treasury bills and corporate bonds or commercial paper, but with rates fluctuating, the funds have a great advantage. Imagine that in the not too distant future the Federal Reserve manages to reduce the rate of inflation close to its 2 percent target rate. As usual, Vanguard’s fund expenses are low, which improves fund yields: The Vanguard Federal Money Market Fund has a yield of 0.72 percent. As I wrote when interest rates fell to nearly zero in 2020, the operating expenses of money market funds exceeded the income they brought in. In another major financial crisis, it is quite possible that they could run into problems again, but the government has always stepped in to fix them. What will get most of the attention on Thursday is that the Fed will raise the benchmark federal funds rate, probably by 0.5 percentage points, to a range of 1.25 to 1.50 percent. Now I would add money market funds to that list, with some qualifications. That rate stands at 0.80 percent but was close to the zero bound for months. The yield on the average big money market fund is still only about 0.6 percent, said Peter G. Crane, the president of Crane Data of Westborough, Mass., which monitors money market funds. This isn’t a return to the early 1980s, when money market rates soared above 15 percent, along with the rate of inflation. Money market yields won’t stay where they are for very long.

The Consumer Price Index picked up by 8.6 percent, as price increases climbed at the fastest pace in more than 40 years.

A few details in the new data could offer glimmers of hope for the Fed and the White House. Some goods prices that had been picking up last year amid shortages are now dropping: Audio and visual products like televisions, for instance, are getting cheaper again. Overall, the report was a discouraging one for policymakers, and it highlighted that they have their work cut out for them as consumer and business demand remains strong. High inflation and the Fed’s attempts to rein it in are contributing to a sour economic mood. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys. A chunk of the May price acceleration owed to a continued pickup in key goods prices. The quick pace of inflation increases the odds that the Fed, which is already trying to cool the economy by raising borrowing costs, will have to move more aggressively and inflict some pain to temper consumer and business demand. In fact, a recent jump in rents on new leases tracked by private data providers means housing costs will probably continue to climb for some time, as renters renew or move and face higher market costs. As climbing prices weigh on voters’ wallets and minds, policymakers across the administration have been clear that helping to return inflation to a more sustainable pace is their top priority, but that doing so mainly falls to the Fed. Production and shipping snarls tied to the pandemic have shown early signs of easing but remain pronounced, keeping products like cars and trucks in short supply. Markets, nervous about the Fed’s policy path and the rising risk of a downturn, tumbled after the Labor Department released the report. A broad array of products and services, including rents, gas, used cars and food, are becoming sharply more expensive, making this bout of inflation painful for consumers and suggesting that it might have staying power. The pickup partly reflected surging gas costs, but after stripping out volatile food and fuel prices still climbed by 0.6 percent, a brisk monthly rate that matched April’s reading.

Details: The Consumer Price Index rose 1% last month. Prices rose 0.3% in April, or 8.3% from a year earlier. Core inflation, which strips out volatile energy ...

Why it matters: Historically, inflation has almost always come in significantly lower than we expected. Why it matters: Hot inflation remains a huge challenge for the Biden administration and the Federal Reserve as they deal with price shocks not seen since the 1980s that are squeezing consumers and souring their view of the economy. A key gauge of inflation accelerated by 8.6% from a year earlier in May, the government said on Friday, a big leap from the previous month as costs for food and gasoline continued to surge.

Year-over-year, the price of consumer goods and services has risen 8.6% overall, as measured by the consumer price index. Gas prices are up 48.7%.

Rising inflation may also stoke fears that a recession is on the way. What all this means is that the cost of everything, from food to rent, will continue to rise, squeezing Americans' budgets even further. Of the CFOs who participated in CNBC's survey, 68% said that a recession will occur in the first half of 2023. Plus, as summer driving season gets into full swing, some may wish to use their cars even more. It's likely: All of the chief financial officers who participated in the latest CNBC CFO Council survey during the second quarter of this year said that a recession is unavoidable. Residents of some states are feeling the burn even more: In Illinois, the average price of a gallon of gas is $5.56, according to AAA. In Nevada, it's $5.62. In California, the average price of gas is $6.42 per gallon — but in Mendocino, at least one gas station is charging nearly $10 per gallon.

The Consumer Price Index picked up by 8.6 percent, as price increases climbed at the fastest pace in more than 40 years.

A few details in the new data could offer glimmers of hope for the Fed and the White House. Some goods prices that had been picking up last year amid shortages are now dropping: Audio and visual products like televisions, for instance, are getting cheaper again. Overall, the report was a discouraging one for policymakers, and it highlighted that they have their work cut out for them as consumer and business demand remains strong. High inflation and the Fed’s attempts to rein it in are contributing to a sour economic mood. A chunk of the May price acceleration owed to a continued pickup in key goods prices. The quick pace of inflation increases the odds that the Fed, which is already trying to cool the economy by raising borrowing costs, will have to move more aggressively and inflict some pain to temper consumer and business demand. In fact, a recent jump in rents on new leases tracked by private data providers means housing costs will probably continue to climb for some time, as renters renew or move and face higher market costs. As climbing prices weigh on voters’ wallets and minds, policymakers across the administration have been clear that helping to return inflation to a more sustainable pace is their top priority, but that doing so mainly falls to the Fed. Gas prices are also rising sharply, something that started before the invasion but has intensified because of it. Production and shipping snarls tied to the pandemic have shown early signs of easing but remain pronounced, keeping products like cars and trucks in short supply. Markets, nervous about the Fed’s policy path and the rising risk of a downturn, tumbled after the Labor Department released the report. A broad array of products and services, including rents, gas, used cars and food, are becoming sharply more expensive, making this bout of inflation painful for consumers and suggesting that it might have staying power. The pickup partly reflected surging gas costs, but even with volatile food and fuel prices stripped out the climb was 0.6 percent, a brisk monthly rate that matched April’s reading.

Record gasoline prices, paired with unrelenting food and shelter costs, are adding strain to Americans' cost of living, suggesting the Fed will have to pump the ...

Rent of primary of residence climbed 5.2% from a year earlier, the most since 1987. Rising demand for travel and entertainment this summer, particularly among wealthier households who have the savings to support discretionary spending, as well as tight labor market conditions will likely maintain upward pressure on services inflation in the coming months. Energy prices climbed 34.6% from a year earlier, the most since 2005, including a nearly 49% jump in gasoline costs. Furniture, including bedding, was one of the few categories to post a monthly decline. That will likely keep the Fed on a trajectory of 50-basis-point hikes beyond July, even though the economy is cooling.” US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. There are growing risks that price pressures in those categories will continue to build. That raises the risk of a recession, which some economists already saw as likely next year. “There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. In May, prices for necessities continued to rise at double-digit paces. Two-year Treasury yields jumped, stocks opened lower and the dollar rose. Shelter, food and gas were the largest contributors.

Record gas prices drove inflation to 8.6% for the 12 months ending in May, higher than the pace in April, according to the latest Consumer Price Index, the ...

"Inflation is proving to be more persistent than was widely believed a year ago, when transitory was the buzzword," said Jim Baird, chief investment officer at Plante Moran Financial Advisors. "The two key questions now? "Inflation is a real challenge to American families." Since consumer spending accounts for about 70% of the economy, a real decrease in consumer spending would deal a big blow to the economy." Meanwhile, new car prices are up 12.6% over the same period. Used car prices, which had shown signs of moderating with monthly declines over the last three months, rose once again, lifting prices 16.1% over the last 12 months. At its May meeting, the Fed raised rates Electricity prices rose 12% over the last 12 months, the biggest annual increase since 2006. The June CPI report due next month is certain to show another big jump in gas prices. The shelter index, which measures rents and other housing costs, posted a 5.5% increase, its biggest 12-month gain since 1991. Both readings are among the biggest jumps in prices experienced by consumers since 1981. It's not just energy that is driving prices higher. AAA's tracking of gas prices

The visit to the nation's busiest entry point for goods comes as President Biden struggles to show progress on resolving supply chain issues that are ...

“As inventory levels improve for appliances, furniture and maybe fixtures, you might see a little bit of softening in those segments,” he said. Mr. Seroka, at the Port of Los Angeles, insists that he hasn’t seen consumer demand fall yet. But analysts say it’s hard to tell whether these drops reflect a normal seasonal lull in shipping before retailers gear up for a busier fall season, or a bigger change for the American economy. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys. But it wasn’t clear what was driving the change, he said. Economists expect consumer demand for imported products to flag at some point, as the Federal Reserve raises interest rates to try to cool the economy. Over the past two decades, labor negotiations led to at least three such slowdowns or stoppages that resulted in delays. The war in Ukraine has disrupted flows of food, fuel and minerals, adding to pandemic-related shortages and pushing inflation to multidecade highs. Let them negotiate in their space, and the rest of us are going to work on keeping the cargo and the economy moving.” Chinese exports are also on the rise as an extended coronavirus lockdown lifts in Shanghai. Mr. Biden is correct that soaring inflation is a global problem. “They are anxious for good reason,” he said.

After several days enmeshed in a diplomatic spat on democracy in Latin America, Biden on Friday confronted domestic crises over inflation and immigration.

That policy, known as Title 42, remained in place after a federal judge in a ruling last month blocked the Biden administration from lifting it. They argue that the issue of gas prices needs to be reframed as a choice between Democratic support for proactive measures — like suspending the gas tax or prodding oil companies to drill on existing leases — and Republican opposition to taking action. Friday’s event was staged at the Port of Los Angeles, allowing Biden to highlight his administration’s efforts to unclog supply chains that have delayed shipments and slowed the manufacturing of key consumer goods. Senate Republicans are committed to blocking legislation that would hold oil and gas companies accountable.” “Senate Democrats are committed to stopping oil companies from excessively increasing gas prices. Biden also criticized shipping companies, suggesting that a virtual oligopoly in the industry had driven up prices for consumers.

President Joe Biden said he got 'viscerally angry' over price hikes by shipping companies that have limited competition.

"Rising costs are top of mind right now for the American people, and one of the more flummoxing causes of inflation is the crushing backlog that we are seeing at our ports. Gas prices at the pump, energy and food prices account for half of the monthly price increases since May. Inflation outside of energy and food ... moderated, the last few months," Biden said. This bill includes numerous provisions intended to help reduce ocean shipping costs and address supply chain issues. "There are nine, nine major ocean-line shipping companies that ship from Asia to the United States." Garamendi was among the lawmakers attending Biden's remarks Friday. He also once again laid blame on Russian President Vladimir Putin and Russia's invasion of Ukraine. Biden calls for ocean shipping overhaul as part of inflation response

USS IowaPort of Los Angeles Los Angeles, California 10:51 A.M. PDT THE PRESIDENT: As we used to say in the United States Senate, I hope you'll.

When the middle class is doing well — and they do well because of labor — when the middle class is doing well, the poor have a way up and the wealthy do very, very well. They’re not allowed out through the Black Sea. And we’re trying to figure out how to get it out of the country to get he- — to — around the world. Look, because of the strong foundation we built, we’re better positioned than just about any country in the world to overcome global — the global inflation we’re seeing and to take the next step towards forming a historic recovery and a new moment. The VA says, “We’re only going to pay you so much for this, if you don’t want to…” — and because they — Medicare negotiates the price for them. So I think we should be able to have the Medicare do what they do when they deal with the VA. And the Congress has to act, and they have been of late. It took the double — we had to double the number of commercial driver licenses being issued by the states in order to speed things up. So we’re trying to help them to get that, and the Russians are blocking the export. I’m doing everything in my power to blunt Putin’s price hike and bring down the cost of gas and food. Mario, thank you, for the Port of Long Beach. And thank Mayor Garcetti of Los Angeles and the Mayor of Long Beach, who I suspect is soon going to be the Congressman of Long Beach, the way it looks like. I was raised in a household when the price of gasoline rose precipitously, it was the discussion at the table. We got to change it, Alan. We’ve got — we can’t — we can’t give up.

President Joe Biden told Democratic donors that they should expect high inflation to persist “for a while,” after new data released Friday show prices ...

Climatenomics lays out how 'supply chain disruptions' has become a euphemism for the effects of climate change.

Shifting the climate crisis from an environmental to an economic issue is at the heart of what Climatenomics presents. “Sure, the pandemic and war on Ukraine are part of it, but I think this is a teachable moment that will allow people to see just how pervasive climate change is in affecting the way we live. Moreover, according to a report from the reinsurance firm Swiss Re last year, climate disasters could cost the US economy 10% of gross domestic product (GDP) – the broadest measure of economic health – by 2050. Bodies that have attempted to come out with estimates that have been met with challenges to their data by climate deniers, resulting in paralysis. “Its impact is broad and systemic, so there’s no one item in the CPI that you can say reflects climate change. According to Keefe, citing National Oceanic and Atmospheric Administration (Noaa) figures, climate-related weather disasters cost the US economy more than $145bn in 2021 – a nearly 50% increase from last year.

Inflation is on the rise throughout the economy but it's hitting the housing and rental markets the hardest. Housing is often Americans biggest single ...

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The S&P 500 shed 2.7% and the Nasdaq dropped about 3%. The May consumer price index rose 8.6% year-over-year, its highest level since 1981. Economists had ...

The S&P 500 is now down about 19% from its record high in January and is once again approaching bear territory. Consumer spending accounts for about 70% of the US economy, and a real decrease in that spending would be a huge blow to gross domestic product. The core index, which excludes food and energy prices, rose by 6%, slightly higher than estimates of 5.9%. The Dow had its 10th down week in 11 and the S&P 500 and Nasdaq its ninth losing week in the past 10. The May consumer price index rose 8.6% year-over-year, its highest level since 1981. "We think the US central bank now has good reason to surprise markets by hiking more aggressively than expected in June," wrote Barclays analysts in a research note on Friday. "We realize it is a close call and that it could play out in either June or July. But we are changing our forecast to call for a 75 [basis point] hike on June 15."

For all the signs that price pressure was spreading, wishful thinking had pervaded the markets for much of May: Bond yields dropped, stocks rallied and the ...

The genie is out of the bottle now, and the Fed faces a challenging period ahead as it attempts to convince markets and the public that this situation won’t last forever. There will be some in the markets who say that inflation isn’t as bad as it looks. Markets and consumers were never going to be able to keep their heads in the sand about inflation forever, but stable long-term inflation expectations had been one of Fed Chair Jerome Powell’s greatest assets. That could include renewed debate about whether the Fed needs to raise the upper bound of the federal funds target rate by 0.75 percentage point at a future meeting, as traders began to price in Friday. That would be even more than the already aggressive 50-basis-point pace of increases that markets are expecting for the next few meetings. Policy makers are generally fine with rising short-term inflation expectations, but they worry that inflation will become a self-fulfilling prophecy when markets and traders start to expect inflation for the foreseeable future: Workers demand higher wages to offset persistently higher costs of living; manufacturers raise prices to offset higher labor costs; and the cycle goes on until, as happened in the late 1970s, someone like former Fed Chair Paul Volcker arrives to end the cycle with sky-high interest rates, albeit with significant economic consequences. Now that investors have learned their lesson the hard way, there’s a risk that inflation expectations may start to drift sustainably higher from here, creating a whole new set of problems for the Fed.