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Yahoo
13 hours ago
- Business
- Yahoo
What To Expect In Wednesday's Report On Inflation
Forecasters expect inflation to rise in May after falling the previous three months. "Core goods" inflation is likely to rise, showing the impact of President Donald Trump's tariffs imposed earlier in the year. A resurgence of inflation could force the Federal Reserve to delay cutting interest likely rose in May after three months of declines, as President Donald Trump's tariffs start to push up Bureau of Labor Statistics is scheduled to release the Consumer Price Index report on Wednesday. According to a survey of economists by Dow Jones Newswires and The Wall Street Journal, it's likely to show that the key cost-of-living measure rose 2.4% over the last year, up from a 2.3% annual increase in April. "Core" inflation, which excludes volatile prices for food and energy, is expected to rise 2.9% over the year, up from 2.8% in report could mark a turning point in the economy's trajectory and be an early indicator in the "hard data" of the effects of the wide-ranging tariffs Trump imposed over the last few months. So far, "soft data" such as surveys have indicated businesses are raising prices and slowing down hiring because of the tariffs, but "hard data" such as official measures of inflation and job growth have been business-as-usual."I expect the May CPI report to begin reflecting upward pressure on goods prices due to tariffs," Ronald Temple, chief market strategist at Lazard, wrote in a commentary. "While companies are carefully avoiding attracting attention by announcing price increases or highlighting that they are a result of tariffs, they have to choose between raising prices to protect margins, cutting other costs to offset tariffs, or suffering lower margins and a weaker share price." One statistic included in the report will be especially useful for gauging the impact of tariffs. A figure economists call "core goods" in the index measures prices of everything besides services, food, and energy. The Bureau of Labor Statistics calls the number "commodities less food and energy." These prices will be the ones hit hardest by the tariffs, economists said. Until this point, core goods had been a bright spot for household budgets, showing declines in prices every month from January 2024 through March 2025. But in April, the core goods index rose 0.1%, and forecasters expect that to go higher in May."We expect a modest push from tariffs with firmer new cars, apparel, and other heavily tariffed goods such as household appliances," Michael T. Gapen, chief U.S. economist at Morgan Stanley, wrote in a commentary. The report could have implications for the nation's monetary policy. Officials at the Federal Reserve closely watch inflation reports to see if prices are rising too fast: the Fed aims to keep inflation running at an annual rate of 2%. However, central bankers use the core measurement in the Personal Consumption Expenditures price index, not CPI, as their a rebound in CPI inflation could pressure the Fed to keep its benchmark interest rate higher for longer. Fed officials have held the influential fed funds rate flat, at a higher-than-usual level, this year out of concern that tariffs could push up prices and reignite inflation."I do not expect the Fed to raise rates in response to tariff-induced inflation, but I also do not anticipate any rate cuts against a backdrop where core inflation is likely to rise to levels around 4%," Temple wrote. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Labor Market Stayed Resilient In May, Adding 139,000 Jobs
The U.S. economy added 139,000 jobs in May, down from 147,000 in April. The unemployment rate held steady at 4.2%, staying in the same narrow range it's maintained for a year. The job market has stayed resilient, defying fears of tariffs causing a disruptions weren't serious enough to drag the job market into distress, at least not in May.U.S. employers added 139,000 jobs in May, down from 147,000 in April, the Bureau of Labor Statistics said Friday. That was more than the 125,000 forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The unemployment rate stayed at 4.2%, the same as in April, remaining in the 4%-4.2% range it's stayed since May data showed employers have remained reluctant to lay off workers, even as hiring has slowed significantly from its breakneck pace of the post-pandemic years. Labor experts expect the job market to start to show cracks in the coming months as uncertainty about tariffs has made companies more reluctant to hire workers, according to recent surveys. But the job market has stayed afloat so far. "Stronger than expected jobs growth and stable unemployment underlines the resilience of the U.S. labor market in the face of recent shocks," Lindsay Rosner, head of Multi-Sector Fixed Income Investing at Goldman Sachs Asset Management, wrote in a commentary. Stock futures jumped in the minutes after the report was released Friday morning. Investors had been nervous about the jobs report on Thursday, after reports on private payrolls and layoffs fueled fears that tariffs were already affecting the labor market. Friday's official government report was a relief, said Adam Hetts, Global Head of Multi-Asset at Janus Henderson Investors. "Good news is good news today, although tariff uncertainty remains, making subsequent hard data releases over the summer extremely important for clarity on the post-Liberation Day economy," Hetts wrote. The lack of red flags about employment could encourage officials at the Federal Reserve to maintain their patient approach to rate cuts. Policymakers at the Fed have held the central bank's benchmark interest rate at a higher-than-usual level this year to keep borrowing costs on all kinds of loans elevated and smother inflation. The Fed is mandated to keep inflation low and employment high, and could lower interest rates to boost the economy if the job market starts to falter. Fed Chair Jerome Powell and other members of the Fed's policy committee have said they are waiting to see whether President Donald Trump's trade wars will boost inflation, cause a wave of unemployment, or both. So far, they have done neither, and the solid job market data could give them breathing room to stay on the fence for longer."With the Fed laser-focused on managing the risks to the inflation side of its mandate, today's stronger-than-expected jobs report will do little to alter its patient approach," Rosner wrote. "We expect the Fed to remain on hold at this month's meeting and think a softening in the labor market data is likely required for the Fed to continue its easing cycle.' Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Job Openings Unexpectedly Rose In April
The job market was resilient in April, with job openings increasing to 7.4 million, beating forecaster expectations. Hiring rose to its fastest pace since May 2024 as employers added 5.6 million new employees. Several economists calibrated their enthusiasm about the surprisingly good data, and still anticipate tariffs will drag down the job market as the year goes on the job market has been full of surprises lately, and they've mostly been for the better: it turns out there were more job openings in April than forecasters had according to a report Tuesday from the Bureau of Labor Statistics, which showed U.S. employers had 7.4 million job openings that month, up from 7.2 million in March. That was more than the 7.1 million openings forecasters had anticipated, according to a survey of economists by Dow Jones Newswires and The Wall Street Job Openings and Labor Turnover Survey report added detail to the department's previously released jobs report, which showed job creation accelerating in April, beating forecaster expectations. In addition to showing a jump in openings, employers hired 5.6 million people, the most since May 2024. Layoffs rose to 1.8 million, the highest since last October but near a historically low report, while overall upbeat, didn't do much to change the big picture of the labor market. Despite monthly ups and downs, the overall trend has been a slowdown from the post-pandemic era, when workers were in high demand. Economists expect the recent turmoil and uncertainty introduced by President Donald Trump's tariff campaign to further reduce job creation as the year progresses.'The numbers still show a gradually slowing, but stable, jobs market," Robert Frick, corporate economist with Navy Federal Credit Union, wrote in a commentary. "The leap in openings reflects normal noise in the numbers, not a surge in new positions, and the hiring rate increase isn't a notable improvement, as that rate remains within the recent weak range.'Many forecasters still expect a slowdown ahead."The data suggest that U.S. employers maintained at least enough confidence to keep more jobs open in April than they had in March, whether through careful planning, strong and adaptable supply chains and/or a good amount of luck," Allison Shrivastava, an economist for the hiring lab at job site Indeed. "But just because employers managed to skate through one month does not ensure they will be able to do so indefinitely, especially as uncertainty and volatility remain heightened." Read the original article on Investopedia
Yahoo
27-05-2025
- Business
- Yahoo
Consumers Breathe Sigh of Relief on U.S.-China Tariff Truce
Consumer confidence increased 12.3 points in May to 98.0, the first time in five months that the closely followed survey of public attitudes on the economy improved. The improved reading comes after President Donald Trump temporarily paused massive tariffs on China. While inflation expectations dropped, economists warned that future price shocks could still undermine public confidence in the economy.A temporary truce in the trade war between the U.S. and China was a big relief for consumers, who said they felt more confident in May for the first time in five months. The Conference Board's Consumer Confidence survey increased by 12.3 points in May to 98.0, halting a slide. Public attitudes about the economy soured so far this year as President Donald Trump began announcing a wide-ranging set of tariffs. The jump surprised economists surveyed by The Wall Street Journal and Dow Jones Newswires, who forecast only a slight improvement from April's reading of 85.7. The May 12 announcement of a temporary reduction in tariffs between the U.S. and China drove the rebound in consumers' outlook. For now, import taxes on goods from China are set at 30%, down from the 145% President Trump had set earlier this year. China also reduced its tariffs on U.S. products in exchange. Trump said the tariff truce would last for 90 days while the two sides negotiate. 'This rebound is a welcome step in the right direction, but like the deal with China, it may prove only a temporary reprieve until we get long-term clarity on trade policy,' wrote Wells Fargo economists Tim Quinlan and Jeremiah Kohl. Consumers' expectations for income, business and labor market conditions in the near term surged higher to 72.8, but still remained below the threshold of 80 that can often signal a recession is near. 'Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects,' said Stephanie Guichard, senior economist for global indicators at The Conference Board. The survey found that May's rebound covered all age, income and political groups. It also showed that consumers are less worried about price increases due to tariffs, as year-ahead inflation expectations dropped to 6.5%. However, economists warned that inflation from tariffs is still likely and could further chip away at consumer confidence in the future. 'Americans have reason to be happy given the rollback in tariffs, especially with China,' wrote Navy Federal Credit Union economist Robert Frick. 'But when prices start rising from existing tariffs in a month or two, it will be a sobering reminder that a new inflation fight has just begun." Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Eyewitness News
20-05-2025
- Business
- Eyewitness News
US inflation cooled in April as Trump rolled out tariffs
WASHINGTON - US consumer inflation cooled slightly in April, but analysts warned prices could spike in the coming months as businesses grapple with President Donald Trump's sweeping "liberation day" tariffs. The data released Tuesday covers the early days of Trump's new levies against most countries - including steep duties on China - which spooked financial markets and raised fears of a spike in prices. The US president has since reversed some of the duties and paused others, helping to soothe nervous investors. The consumer price index (CPI) eased to 2.3 percent in April from a year ago, a tick below the 2.4 percent figure recorded in March, the Labor Department said in a statement. "The CPI report shows that the American people are experiencing real economic relief: grocery, gas, and egg prices are down, while real wages are up," White House spokesman Kush Desai said in a statement. Democratic Senator Elizabeth Warren took a different view on the data. "Consumers and businesses will feel little relief from President Trump folding to Xi Jinping and are bracing for supply chain disruptions and even empty shelves," she said in a statement, referring to the deal struck over the weekend between the United States and China to lower tariffs. The April CPI release was the smallest 12-month increase since February 2021, and was slightly lower than the median estimate from surveys of economists conducted by Dow Jones Newswires and The Wall Street Journal. "This may be the low point in 2025," Nationwide senior economist Ben Ayers wrote in a note shared with AFP. "As tariff costs increasingly flow into consumer prices, we expect a jump in the CPI this summer, pushing the annual reading back above three percent," he added. "Looking ahead, higher tariffs will lead to a renewed inflation impulse," EY chief economist Gregory Daco said in a statement. But, he added, the recent tariff detente with China means that impulse will be slightly weaker than previously expected. Prices rose 0.2 percent from a month earlier, with "more than half" of the increase due to a 0.3 percent rise in shelter costs, according to the Labor Department. Excluding volatile food and energy costs, the inflation rate was 0.2 percent from a month earlier, and 2.8 percent over the past 12 months. The monthly figure was slightly below expectations, while the annual figure was in line with forecasts. US stocks were mixed in early trading. 'TOO EARLY' TO TELL Despite the good news overall, there were nevertheless some signs of Trump's tariffs in the data. The index for household furnishings and operations increased 1.0 percent in April after standing still in March, the Labor Department said. In a recent investor note, economists at Deutsche Bank had flagged that this data point would provide a good indication of how some "import-heavy categories" could be affected by tariffs. But, they added, it was still "too early for tariffs to be evident in the aggregate numbers." The energy index - which fell sharply in March - increased 0.7 percent in April, according to the Labor Department, spurred by a sharp rise in natural gas and electricity prices. The gasoline index decreased 0.1 percent over the month on a seasonally-adjusted basis, and by 11.8 percent over the past 12 months. The data will likely be well-received by the US Federal Reserve as it weighs when to cut interest rates. Futures traders see a roughly 90 percent chance the central bank will extend its recent pause at the next rate decision in June, holding its benchmark lending rate at between 4.25 and 4.50 percent, according to data from CME Group.
