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Business Times
4 days ago
- Business
- Business Times
US producer prices unchanged in June
[WASHINGTON] US producer prices were unexpectedly unchanged in June as an increase in the cost of goods because of tariffs on imports was offset by weakness in services. The unchanged reading in the producer price index for final demand last month followed an upwardly revised 0.3 per cent rise in May, the Labor Department's Bureau of Labor Statistics said on Wednesday (Jul 16). Economists polled by Reuters had forecast the PPI rising 0.2 per cent, after a previously reported 0.1 per cent gain in May. In the 12 months through June, the PPI increased 2.3 per cent after advancing 2.7 per cent in May. Data on Tuesday showed consumer prices picking up in June, with solid gains in tariff-exposed goods like household furnishings and supplies, appliances, sporting goods and toys as well as windows, floor coverings and linens. Economists said June's Consumer Price Index report was likely the start of the tariff-induced increase in inflation from the import duties announced in April. But some expected slower services price growth because of softening demand for travel and hotel accommodation to partially offset the boost to inflation from tariffs. President Donald Trump last week announced higher duties would come into effect on August 1 for imports from a range of countries, including Mexico, Japan, Canada and Brazil, and the European Union. Economists expected these tariffs would keep goods prices elevated through the end of the year. The Federal Reserve is expected to leave its benchmark overnight interest rate in the 4.25 per cent-4.50 per cent range at a policy meeting later this month. Minutes of the central bank's June 17-18 meeting, which were published last week, showed only 'a couple' of officials said they felt rates could fall as soon as the July 29-30 meeting. Prior to the PPI report, economists estimated that the Personal Consumption Expenditures (PCE) Price Index, excluding the volatile food and energy components, increased 0.3 per cent in June after rising 0.2 per cent in May. The so-called core PCE inflation was forecast to have advanced 2.8 per cent on a year-over-year basis last month, after climbing 2.7 per cent in May. The core PCE price index is one of the inflation measures tracked by the US central bank for its 2 per cent target. REUTERS
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Business Standard
5 days ago
- Business
- Business Standard
US inflation picks up in June as early tariff effects start to show
US consumer prices increased by the most in five months in June amid higher costs for some goods, suggesting tariffs were starting to have an impact on inflation and potentially keeping the Federal Reserve on the sidelines until September. Softening demand as consumers hunker down, however, is limiting price increases for services like airline fares and hotel and motel rooms, keeping underlying inflation muted for now. That trend, if sustained, could ease concerns of a broad-based rise in price pressures from tariffs. Nonetheless, economists generally expect the tariff-induced rise in inflation to become more evident in the July and August CPI reports, arguing that businesses were still selling merchandise accumulated before President Donald Trump announced sweeping import duties in April. They also noted that when Trump slapped tariffs on washing machines in 2018, it took several months for the duties to show up in the inflation data. Trump last week announced higher duties would come into effect on August 1 for imports from a range of countries, including Mexico, Japan, Canada and Brazil, and the European Union. "Inflation has begun to show the first signs of tariff pass-through," said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. "While services inflation continues to moderate, the acceleration in tariff-exposed goods in June is likely the first of greater price pressures to come. The Fed will want to hold steady as it awaits more data." The CPI increased 0.3per cent last month after edging up 0.1per cent in May, the Labor Department's Bureau of Labor Statistics said on Tuesday. That gain was the largest since January, and also reflected higher rental costs. Gasoline prices rebounded 1.0per cent after four straight monthly declines. Food prices rose 0.3per cent, matching the increase in May. Grocery store prices also advanced 0.3per cent, lifted by a 1.4per cent increase in the costs of nonalcoholic beverages and 2.2per cent jump in coffee prices, likely because of higher import duties. Fruits and vegetables cost 0.9per cent more while beef prices jumped 2.0per cent. But eggs were 7.4per cent cheaper as an avian flu outbreak abated. The cost of food consumed away from home rose 0.4per cent. In the 12 months through June, the CPI advanced 2.7per cent after rising 2.4per cent in May. Economists polled by Reuters had forecast the CPI would climb 0.3per cent and rise 2.6per cent on a year-over-year basis. The US central bank tracks Personal Consumption Expenditures (PCE) Price Index data for its 2per cent target. The Fed is expected to leave its benchmark overnight interest rate in the 4.25per cent-4.50per cent range at a policy meeting later this month. Minutes of the central bank's June 17-18 meeting, which were published last week, showed only "a couple" of officials said they felt rates could fall as soon as the July 29-30 meeting. CPI inflation readings came in on the low side in February through May, leading to demands by Trump for the Fed to lower borrowing costs. Trump persisted on Tuesday, writing on his Truth Social media platform, "Consumer Prices LOW. Bring down the Fed Rate, NOW!!" Stocks on Wall Street were mixed. The dollar rose against a basket of currencies, hitting a 15-week high versus the Japanese yen. US Treasury yields rose. TAME UNDERLYING INFLATION Excluding the volatile food and energy components, the CPI rose 0.2per cent in June. The so-called core CPI edged up 0.1per cent in the prior month. Despite the moderate gain, there were some solid increases in tariff-sensitive goods. Prices of household furnishings and supplies shot up 1.0per cent, the largest advance since January 2022, after climbing 0.3per cent in May. There was a record 4.2per cent jump in the prices of window and floor coverings and other linens. Prices for appliances surged 1.9per cent, the biggest rise since August 2020, while the cost of apparel rebounded 0.4per cent. Sporting goods prices accelerated 1.4per cent while toys vaulted 1.8per cent, the most since April 2021. But those rises were partially offset by a 0.7per cent decline in the cost of used cars and trucks. New motor vehicle prices fell 0.3per cent for a second straight month. Core goods prices rose 0.2per cent after being unchanged in May. Owners' equivalent rent of primary residence rose 0.3per cent, but the cost of hotel and motel rooms declined 3.6per cent. Airline fares dipped 0.1per cent. Healthcare costs increased 0.5per cent, driven by a 1.3per cent rise in dental services, which was the biggest gain in three years. There were also increases in hospital services and prescription medication. The costs of services excluding energy services increased 0.3per cent after gaining 0.2per cent in May. A slowing labor market, which is curbing wage growth, is also contributing to keeping services inflation in check. The overall core CPI inflation increased 2.9per cent in the 12 months through June after rising by 2.8per cent for three straight months. "If the recent tariffs threatened for August 1 go into effect, it will take a few months for that additional boost to inflation to be felt in goods prices and will keep the Fed on the sideline unless the labor market takes a sudden turn for the worse," said Ryan Sweet, chief US economist at Oxford Economics. Goldman Sachs is forecasting monthly core CPI inflation increases of between 0.3per cent-0.4per cent over the next few months, reflecting tariff-related increases in the prices of consumer electronics, autos and apparel. The investment bank expects limited near-term impact on core services inflation. Based on the CPI data, economists estimate core PCE increased 0.3per cent in June after rising 0.2per cent in May. Core PCE inflation was forecast to have advanced 2.8per cent on a year-over-year basis last month after climbing 2.7per cent in May. Those estimates could change after the release on Wednesday of producer price data, but some economists are hopeful that weakening demand will limit the scope for businesses to pass on tariffs to consumers. "With consumers becoming more cautious about spending and the job market starting to lose some momentum, the recent price increases are expected to be gradual rather than dramatic," said Sung Won Sohn, a finance and economics professor at Loyola Marymount University.
Business Standard
27-06-2025
- Business
- Business Standard
China's Shanghai Composite index ends 0.70% lower
Asian stocks ended mixed on Friday despite U.S. President Donald Trump announcing a trade deal with China on rare earths and hinting at a major upcoming deal with India. The ceasefire between Iran and Israel continued to hold and weak U.S. data fueled rate cut hopes, helping limit regional losses. Gold dipped over 1 percent below $3,300 per ounce and the dollar index hovered near its lowest level since March 2022 ahead of the U.S. May Personal Consumption Expenditures (PCE) Price Index data due later in the session. Oil was on track for its worst weekly loss since March as supply concerns eased. China's Shanghai Composite index fell 0.70 percent to 3,424.23 as new data showed China's industrial profits fell 9.1 percent year on year in the first five months of the year in the face of deepening deflationary pressures and a persistent property crisis.
Business Times
27-06-2025
- Business
- Business Times
US consumer spending falls unexpectedly in May
[WASHINGTON] US consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1 per cent last month after an unrevised 0.2 per cent gain in April, the Commerce Department's Bureau of Economic Analysis said on Friday (Jun 27). Economists polled by Reuters had forecast consumer spending would edge up 0.1 per cent. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5 per cent annualised rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5 per cent pace, the slowest rate since the second quarter of 2020. That data potentially puts spending on a slow growth path in the second quarter. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed chair Jerome Powell told lawmakers this week that the US central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1 per cent in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3 per cent after climbing 2.2 per cent in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2 per cent last month. That followed a 0.1 per cent rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7 per cent after rising 2.6 per cent in April. The Fed tracks the PCE price measures for its 2 per cent inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25 per cent-4.50 per cent range, where it has been since December. REUTERS
Time of India
27-06-2025
- Business
- Time of India
US consumer spending falls unexpectedly in May
U.S. consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity , dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department 's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast consumer spending would edge up 0.1%. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nortonライセンスの有効期限が切れています? Norton 詳細 Undo A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5% annualized rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5% pace, the slowest rate since the second quarter of 2020. Live Events That data potentially puts spending on a slow growth path in the second quarter. The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1% in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3% after climbing 2.2% in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2% last month. That followed a 0.1% rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7% after rising 2.6% in April. The Fed tracks the PCE price measures for its 2% inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.
