Inflation

2022 - 9 - 12

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Image courtesy of "The Wall Street Journal"

CPI Report Live Updates: U.S. Inflation Slowed Slightly to 8.3% in ... (The Wall Street Journal)

Follow The Wall Street Journal's full markets and consumer-price inflation report coverage.

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Image courtesy of "The Washington Post"

Rising food and housing costs pushed inflation higher in August (The Washington Post)

Consumer prices in August climbed 0.1 percent compared to the month before, despite falling costs for gas and energy. A number of economists had been ...

[beginning to feel better ](https://www.washingtonpost.com/business/2022/09/10/economy-inflation-gas-prices/?itid=lk_inline_manual_36)about the economy, and consumer sentiment, which collapsed in June, has been inching up. Russia’s February invasion of Ukraine already caused a massive run-up in energy and gas prices this year, and White House officials are [said](https://www.washingtonpost.com/business/2022/08/26/fed-powell-jackson-hole/?itid=lk_inline_manual_30) in a closely watched speech last month. Fed watchers and the financial markets increasingly expect ... But travel may actually escape a lot of what’s happening in the economy because there’s such pent-up demand.” The Fed’s goal is to use higher rates to dampen demand in the economy, especially since its tools can’t do anything to fix issues like supply chain logjams, worker shortages or the war in Ukraine. Still, the Fed has sent a clear message: it is pressing on. “We thought we’d see inflation start to come down, and instead what we’ve seen is inflation really sort of entrenched,” said Betsey Stevenson, professor of public policy and economics at the University of Michigan and a former member of the White House Council of Economic Advisers. Costs for housing, medical care, new cars and household furnishings were all up compared to the month before. The stock market fell sharply on the news, as investors fretted that the new data would embolden Federal Reserve officials to continue raising interest rates next week in an effort to slow inflation down. The Fed and some economists prefer to focus on a measure of inflation known as “core inflation," which strips away more volatile categories like food and energy. It showed that prices were up 8.3 percent in August compared to 12 months earlier, higher than analysts expected.

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Image courtesy of "The New York Times"

C.P.I. Report Live Updates: U.S. Inflation Remains High in August (The New York Times)

Inflation did not ease as expected in August, with an 8.3 percent rise in the Consumer Price Index showing that the squeeze on consumers remains acute.

The global economy is slowing sharply, and threats remain to the American recovery if European sanctions force millions of barrels of Russian oil off the global market in the months to come. The National Federation of Independent Business reported on Tuesday that its Small Business Optimism Index rose in August as inflation anxiety eased, continuing a rebound from its depths earlier this year. [have](https://www.nytimes.com/2022/06/10/business/economy/may-2022-cpi-inflation.html) [repeatedly](https://www.nytimes.com/live/2022/07/13/business/cpi-report-inflation) [predicted](https://www.nytimes.com/2022/02/10/business/economy/inflation-cpi-january-2022.html)that inflation was about to decelerate only to have those expectations scuppered. Biden and his party, as Democrats seek to retain control of the House and Senate. Biden has claimed progress in the fight against inflation, including with the signing last month of an energy, health care and tax bill that Democrats called the Inflation Reduction Act. “And then of course all of this is further exacerbated by what’s going on with the war in the Ukraine.” That could be poised to continue, because those prices are closely linked to wages, which have been climbing notably as a result of a strong job market with low unemployment and worker shortages that span many fields. Last Thursday, India also [banned exports](https://www.wsj.com/articles/indias-rice-export-ban-will-further-strain-global-food-supplies-11662722548) of one kind of rice and put a tax on others, in an effort to shore up supplies and fight domestic inflation. After peaking at $5.02 in June, gasoline prices have dropped for 91 straight days, and the national average stood at just over $3.70 a gallon on Tuesday, data from AAA show. A bout of bird flu earlier this year made chickens and eggs scarce, driving up the prices of both. Stock prices swooned as Wall Street digested the possibility that the Fed might need to be even more aggressive in constraining the economy in order to wrangle an inflation problem that is worse than anything America has faced since the 1980s. Food prices in August were up 11.4 percent from the same month a year ago.

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Image courtesy of "Financial Times"

US inflation rate exceeds forecast (Financial Times)

Consumer price growth keeps pressure on Federal Reserve for further big rate increase this month.

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Image courtesy of "Reuters"

Wall Street tumbles as inflation data stokes bets of large rate hikes (Reuters)

U.S. consumer prices rise more than expected in August · Traders price in a small chance of 100 bps rate hike · Indexes down: Dow 1.87%, S&P 2.30%, Nasdaq 3.07%.

The small cap Russell 2000 index [(.RUT)](https://www.reuters.com/quote/.RUT) dipped 2.9%. But now, it seems like the destination is now a little bit more in question," said Brian Jacobsen, senior investment strategist, Allspring Global Investments. [(.SPXBK)](https://www.reuters.com/quote/.SPXBK) dropped 2.8%. 20-21 meeting, while expecting rates to peak at around 4.28% in March 2023. [(.DJI)](https://www.reuters.com/quote/.DJI) was down 848.07 points, or 2.62%, at 31,533.27, the S&P 500 [(.SPX)](https://www.reuters.com/quote/.SPX) was down 122.57 points, or 2.98%, at 3,987.84, and the Nasdaq Composite [(.IXIC)](https://www.reuters.com/quote/.IXIC) was down 470.90 points, or 3.84%, at 11,795.51. [(.VIX)](https://www.reuters.com/quote/.VIX), also known as Wall Street's fear gauge, rose to 25.74 points. [(AAPL.O)](https://www.reuters.com/companies/AAPL.O), Microsoft Corp [(MSFT.O)](https://www.reuters.com/companies/MSFT.O) and Tesla Inc [(TSLA.O)](https://www.reuters.com/companies/TSLA.O) dropped 4.1% each, while Alphabet Inc [(GOOGL.O)](https://www.reuters.com/companies/GOOGL.O), Amazon.com Inc [(AMZN.O)](https://www.reuters.com/companies/AMZN.O) and Meta Platforms Inc [(META.O)](https://www.reuters.com/companies/META.O) slid between 4.8% and 7.4%. Excluding the volatile food and energy components, core CPI increased to 6.3% from 5.9% in July. [(.SPLRCL)](https://www.reuters.com/quote/.SPLRCL). [The Thomson Reuters Trust Principles.](https://www.thomsonreuters.com/en/about-us/trust-principles.html) [(.IGX)](https://www.reuters.com/quote/.IGX), which houses rate-sensitive technology and growth shares, fell 3.8% as Treasury yields rose, while its value counterpart [(.IVX)](https://www.reuters.com/quote/.IVX) lost 2.2%. [read more](/markets/us/monthly-us-consumer-prices-unexpectedly-rise-august-core-inflation-picks-up-2022-09-13/)

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Image courtesy of "CNN"

American inflation rose more than expected in August (CNN)

US inflation ticked back up in August, despite plunging gas prices, according to data from the Bureau of Labor Statistics released Tuesday.

A prolonged period of historic rate hikes could do serious damage to the US economy. Almost all other categories saw price increases, including shelter, which increased 0.7% in August and is up 6.2% year-on-year, the largest increase since 1991. The last time the headline CPI rate declined in consecutive months was the first part of 2020. The month-on-month gain of 0.6% was double what economists had expected. Economists had projected that inflation would fall from July to August by 0.1%, after holding steady at 0% growth from June to July. On a monthly basis, consumer prices rose 0.1% from July, according to the Consumer Price Index, which measures a basket of consumer goods and services.

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Image courtesy of "Forbes"

CPI Inflation Low, But Offers Little Encouragement For Fed Or Markets (Forbes)

Inflation saw a 0.1% for August according to the CPI report, but this was almost entirely due to gasoline prices, other prices rose more than the Fed wanted ...

So markets believe that today’s report has made the Fed slightly more nervous about where inflation is trending. inflation may be trending in the right overall direction, but it’s not getting there fast enough for the Fed. The Fed wants to see a broad range of prices signal that the wave of inflation is past, that’s not a conclusion that’s easy to draw from this CPI report. So today’s inflation report despite the low month-on-month number is not good news for markets. Even though food costs rose 0.8% for the month, which is high, that’s still the lowest level of food price inflation that we’ve seen in many months. Still the CPI report was not entirely negative.

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Image courtesy of "The New York Times"

Markets Fall After Higher-Than-Expected Inflation Data (The New York Times)

Stocks plunged, government bond yields soared and the dollar bounced after investors were wrong-footed by data showing stubbornly high price increases last ...

“Investors were getting too comfortable with the idea that inflationary pressures were easing.” On Tuesday, the analysts raised their expectations to a full point. For a time, some had bet on a less aggressive, half-point increase as the more likely option. “This will leave the Fed more concerned.” Yet there is also acknowledgment that the Fed’s task has been made harder by stubbornly high inflation. With a sense that the Fed’s message had been received, some investors began to see the higher path forward for interest rates as a possible limit on how high rates would go. And the U.S. Every sector in the S&P 500 index fell as investors rethought how much the Fed may need to raise interest rates, which makes borrowing more expensive for consumers and companies. Then, a series of speeches by Fed officials, including the central bank’s chair, The Nasdaq Composite stock index, which is full of tech stocks that are seen as more sensitive to rising interest rates, fell nearly 4 percent. “We are not out of the woods yet. Stocks, which were trading higher in the hours before the data was released, turned sharply lower, with the S&P 500 slumping 3 percent.

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Image courtesy of "PBS NewsHour"

U.S. inflation ticks down slightly, but stays stubbornly high (PBS NewsHour)

Sharply lower prices for gas and cheaper used cars slowed U.S. inflation in August for a second straight month, though many other items rose in price, ...

The Fed’s rapid rate increases — the fastest since the early 1980s — typically lead to higher costs for mortgages, auto loans and business loans, with the goal of slowing growth and reducing inflation. [escalated families’ grocery bills](https://www.pbs.org/newshour/economy/this-new-orleans-food-bank-opened-to-serve-more-people-now-inflation-is-forcing-them-to-turn-dozens-away), rents and utility costs, among other expenses, inflicting hardships on many households and deepening gloom about the economy despite strong [job growth](https://www.pbs.org/newshour/economy/job-openings-rose-in-july-dashing-federal-reserve-hopes-for-cooling) and low unemployment. A shortage of available houses has also forced more people to keep renting, thereby intensifying competition for apartments. [Groceries continue to rise rapidly](https://www.pbs.org/newshour/nation/long-lines-return-to-u-s-food-banks-as-inflation-hits-high), jumping 0.7 percent from July to August. The cost of rental apartments and other services, such as health care, are likely to keep rising in the months ahead. Republicans have sought to make inflation a central issue in the midterm congressional elections. Many businesses are also reporting signs that supply backlogs and inflation are beginning to fade. But executives at Kroger, the nation’s largest grocery chain, said that falling prices for farm commodities like wheat and corn could slow cost increases for food. But excluding the volatile food and energy categories, so-called core prices jumped 0.6 percent from July to August — up sharply from 0.3 percent the previous month and dashing hopes, for now, that core prices might be starting to moderate. Inflation remains far higher than many Americans have ever experienced and is keeping pressure on the Fed. In the 12 months ending in August, core prices jumped 6.3 percent, up from 5.9 percent in July. On a monthly basis, prices rose 0.1 percent, after a flat reading in July.

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Image courtesy of "ABC News"

Stocks tumble on dashed inflation hopes; S&P 500 loses 3% (ABC News)

Stocks are tumbling, and disappointment is smacking markets worldwide, following Wall Street's sudden realization that inflation isn't slowing as much as ...

Expectations for a more aggressive Fed also helped the dollar add to its already strong gains for this year. The hope is that the Fed can pull off the tightrope walk of slowing the economy enough to snuff out high inflation, but not so much that it creates a painful recession. Traders now see a better than 60% likelihood the Fed will pull its federal funds rate all the way up to a range of 4.25% to 4.50% by March. The ensuing wipeout fits what's become a pattern on Wall Street this year: Stocks fall on worries about inflation, turn higher on hopes the Fed may ease up on rates and then fall again when data undercuts those hopes. Apple, Microsoft and Amazon all fell more than 4% and were the heaviest weights on the market. Technology and other high-growth companies fell more than the rest of the market because they're seen as most at risk from higher rates. The federal funds rate is currently in a range of 2.25% to 2.50%. But the hope was that inflation was in the midst of quickly falling back to more normal levels after peaking in June at 9.1%. That would be quadruple the usual move, and no one in the futures market was predicting such a hike a day earlier. “This indicates the Fed still has a lot of work to do to bring inflation down.” Big tech stocks swooned more than the rest of the market, as all 11 sectors that make up the S&P 500 sank. The Dow dropped more than 1,000 points Tuesday afternoon and the S&P 500 sank 3.6%.

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