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Business Insider
2 days ago
- Business
- Business Insider
Inflation ticked up less than expected in May, considering fear around Trump's tariffs
The year-over-year inflation rate ticked up in May to 2.4% from 2.3%, less than expected and reversing this year's cooling trend. Economists expected the consumer price index to surge 2.5% in May from a year earlier. Morgan Stanley expected the new consumer price index report to show evidence of "tariff-driven inflation," given reports and surveys have shown recent and expected changes to prices. The Federal Reserve's Beige Book, which collected information from businesses and others on or before May 23, said all 12 Federal Reserve Districts "indicated that higher tariff rates were putting upward pressure on costs and prices." President Donald Trump said the administration is "working to rapidly defeat inflation" and has repeatedly pushed the Fed to lower interest rates. Federal Open Market Committee members will meet next week to decide on their next rate move. CME FedWatch shows based on market trades, that there's a strong chance rates will remain unchanged. "If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," said Federal Reserve chair Jerome Powell at a May 7 press conference following the announcement that the Fed held interest rates steady. Powell added that tariffs' effects on inflation could be either short-lived or more persistent, depending on how high they are and how long it takes for the effects to show up in prices. Tariff decisions have already affected business strategies and sales. Small-business owner Michael Salvatore told Business Insider that the legal whiplash with tariffs means more uncertainty. While there have been "serious discussions" about increasing prices at his business locations in Chicago, he said, "there's only so much our customers can reasonably be expected to absorb," and he doesn't want to have to go back and forth on prices. "As a small business owner, uncertainty is just as damaging as the tariffs themselves," Salvatore said. "I can't make clear purchasing decisions or long-term plans when I don't know what rules I'm playing by." Hard economic data has stayed strong, including better-than-expected job growth, and even soft data is starting to improve. Changes to trade deals in May, such as the 90-day pause on many tariffs with China, could be playing a role. On Monday, the Survey of Consumer Expectations from the Federal Reserve Bank of New York showed inflation expectations declined. New National Federation of Independent Business data showed small businesses were more optimistic in May after the index dropped the previous two months. "Although optimism recovered slightly in May, uncertainty is still high among small business owners," Bill Dunkelberg, NFIB's chief economist, said. "While the economy will continue to stumble along until the major sources of uncertainty are resolved, owners reported more positive expectations on business conditions and sales growth."
Yahoo
02-03-2025
- Business
- Yahoo
Target, Broadcom, Costco, and more stocks to watch this week
After a hectic earnings week and ongoing tariff war, March kicks off with a select group of earnings reports, with a strong focus on the AI and retail sectors. Here's a look at what investors should watch in the days ahead. Target (TGT) is set to release its earnings report on Tuesday morning, providing insights into the retail giant's performance amid shifting consumer spending trends. Later that day, after the closing bell, cybersecurity firm CrowdStrike (CRWD) will announce its earnings. The company, which gained significant attention last year following a widespread global tech outage linked to its software, will be closely watched by investors assessing its resilience and growth trajectory. On Wednesday, semiconductor company Marvell Technology (MRVL) will report its earnings after the market closes. Thursday will be a particularly busy day for earnings, with several major companies releasing their financial results. Broadcom (AVGO) and Costco (COST) are scheduled to report after the closing bell, offering insights into the semiconductor and retail warehouse sectors, respectively. Earlier in the day, grocery chain Kroger (KR) and department store giant Macy's (M) will announce their earnings, shedding light on consumer spending habits. The week kicks off with the release of S&P's final U.S. Manufacturing PMI for February on Monday morning. Midweek, on Wednesday, S&P will publish its final U.S. Services PMI for February, accompanied by the ADP employment report, which offers a snapshot of private-sector job growth. Additionally, the Federal Reserve will release its Beige Book, a comprehensive survey of economic conditions across the 12 Federal Reserve Districts. This report is closely watched for its qualitative assessment of inflationary pressures, labor market trends, and overall economic momentum, which could shape the Fed's future policy decisions. On Thursday, investors will turn their attention to the latest weekly initial jobless claims data along with the U.S. trade deficit report. The week concludes with a highly anticipated set of labor market indicators on Friday, including the official U.S. jobs report, the unemployment rate, and data on hourly wage growth. These figures will be crucial in gauging the resilience of the job market and potential implications for monetary policy. For the latest news, Facebook, Twitter and Instagram. Sign in to access your portfolio
