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CNN
3 days ago
- Business
- CNN
Inflation holds steady, but Trump's tariffs are boosting some prices
Falling gas prices helped keep overall inflation tame in July; however, a broader array of products got even more expensive last month, showing that President Donald Trump's expansive tariffs are being passed along to consumers. Consumer prices rose 0.2% in July, keeping the annual inflation rate at 2.7%, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics. Stocks were higher on Tuesday. The Dow rose 480 points, or 1.09%. The S&P 500 rose 0.73% and the Nasdaq Composite gained 0.72%. 'We have seen moderate inflation over the last year … certainly, prices are not going up nearly as quickly as they were a few years ago,' Gus Faucher, senior vice president and chief economist at PNC Financial Services Group, told CNN in an interview. 'But I do think that consumers are going to start seeing more price increases at the grocery store, at Amazon, things like that.' 'Consumers are going to start to feel a little more stretched over the next few months as we see more of the impact of tariffs passed through from businesses to consumers,' he added. However, considering that energy and food prices tend to be quite volatile on a month-to-month basis, the 'core' index that excludes those two categories is widely viewed as a good measurement of underlying inflation trends. Core CPI rose 0.3% from June, the fastest increase since January, which brought the annual rate to 3.1%, the highest in five months. 'Gas prices are down, but we can't count on that to keep inflation low,' Faucher said. 'So, even if energy prices stabilize and gas prices are just stable, then that means that overall inflation is going to be higher, and that is going to put more pressure on consumers.' The core goods category, which is being closely scrutinized in the wake of higher tariffs, rose 0.2% for the second consecutive month. Economists had expected inflation to heat up slightly last month, to 0.2% from June and by 2.8% annually, according to FactSet. While tariff-exposed goods categories did see some price increases in July, the lion's share of cost pressures came from services, particularly the housing-related shelter category, which has been an inflationary bogeyman in recent years. Still, overall shelter prices (which include measurements of rents and other housing-related costs) continued to cool from pandemic-era spikes. Prices rose 0.2% in July and eased to 3.7% from a year ago, the lowest 12-month increase since October 2021. How tariff-exposed goods prices are rising Trump's sweeping trade policy of tacking steep tariffs on most goods that cross America's borders are widely expected to result in higher prices for businesses and consumers — although not to the extent seen in 2022 and other high-inflationary periods. While there may not be a broad-based acceleration in inflation, higher prices anywhere — especially come Back-to-School season and around the holidays — aren't easy to swallow for many Americans, especially those with little-to-no wiggle room in their budgets. 'The thing to understand is [tariff-induced inflation] is not going to happen with a bang but rather more of a slow deterioration in purchasing power,' Joe Brusuelas, RSM US chief economist, told CNN. Many economists also believe that tariffs will cause a one-time lift in prices and not necessary a lasting and accelerating surge in price hikes. There's a laundry list of reasons why tariff-driven price hikes are a slow boil: Businesses loaded up their warehouses with pre-tariffed goods; higher costs have been split by entities along the supply chain, lessening the blow at the retail store; and Trump's fits-and-starts approach to tariffs has meant that the bulk of them did not go into effect for months. At the same time, inflation has remained relatively tame for good and not-so-good reasons: Ongoing deflationary trends in key areas, marking a continued unwinding from pandemic-era shortages and price spikes; falling gas prices (they're down 9.5% from July of last year); there are many other components of CPI (core goods are just 25%); and then because of depressed consumer demand in areas such as travel. Monthly economic data can be quite volatile, and economists frequently caution that it's important to take a longer view. However, CPI reports and, especially, July's data are bearing hallmarks of higher tariffs, albeit in a scattershot fashion: Commodities excluding food and gas: Prices rose 0.2% for the second consecutive month after being flat in May. This index excludes volatile food and energy components and is being closely scrutinized in the wake of higher tariffs. Apparel and footwear: Trump's tariffs were expected to raise the cost of most clothing and footwear, but the hardest-hit items were expected to be some of the most basic (cheap T-shirts, socks, sneakers and undies). The clothes and shoes that land on retail shelves are largely sourced from countries such as Vietnam and China, which have tariff rates north of 20% and 30%, respectively. Overall apparel prices nudged up just 0.1% in July after rising 0.4% in June. Footwear, however, shot up 1.4% in July — the highest monthly rate in more than four years — after rising 0.7% in June. Appliances: This was one of the first categories to show sharper increases in prices. After rising 0.8% in April and May and then 1.9% in June, prices for appliances settled back down in July, falling 0.9%. Furniture and bedding: Price hikes accelerated in July, rising 0.9% after posting a 0.4% increase in June. Outdoor equipment and supplies: This import-heavy category saw prices jump 2.2% in July, the highest in more than two years, after falling 0.1% in June. Sporting goods: The pace of price hikes remained elevated, although not to the extent in June when they rose 1.4%. Prices were up 0.4% in July. Tools, hardware and supplies: During much of 2023 and 2024, prices fell for this category. However, since April, prices have risen between 1.1% and 1.2% each month (the index was up 1.2% in July.). Toys: After rising by 1.3% and 1.8% in May and June, respectively. Toy prices inched up 0.2% in July. More price hikes could be coming down the pike, however, Hasbro CEO told CNN's Audie Cornish recently. The vast majority of toys are produced in China. Windows and floor coverings and other linens: The US textile industry has shrunk considerably in recent decades, resulting in a high reliance on imported linens. After a record-high 4.2% increase in June, prices rose 1.2% in July. Fed at the crossroads, BLS in the crosshairs The tariff pass-through to consumers appeared to be slower in July than it was in June, said Oliver Allen, senior US economist at Pantheon Macroeconomics. 'I don't think that necessarily means that it's over, it's done, or we've seen the peak,' he said. 'I don't think that's the case at all.' The pre-tariff stockpiling has mitigated some of the price increases thus far; however, it can't happen indefinitely, he said. 'The question we have on top of that is where does that (price increase) show up? Who eats that? Where does that show up in the supply chain?' he said. 'There's probably going to be some of that eaten into the supply chain, but I think a lot of it is going to be passed on to consumers.' 'But as far as the economy is concerned, either way, it's not a particularly good outcome,' he said, adding that businesses and consumers will have less money to spend. As for the Federal Reserve, Tuesday's inflation data doesn't necessarily mean the central bank will stay on the sidelines at its upcoming meeting in September, wrote Michael Hanson, senior global economist at JPMorgan Securities. 'Today's report does not pressure the Fed away from a likely insurance cut at its next meeting given concerns about a weakening labor market,' he wrote in a note Tuesday. The US labor market appears to be on much shakier ground than was thought heading into the Fed's last rate decision in late-July. The August 1 jobs report showed that job gains in July were tepid, at 73,000, and that job gains in the two months prior were revised down substantially. The large downward revisions put the BLS in the crosshairs. Trump fired BLS Commissioner Erika McEntarfer, baselessly claiming she 'rigged' the data (an allegation that Trump's former BLS head and a cadre of statisticians and economists resoundingly disputed). The upheaval at the BLS does not directly impact July's CPI report; however, other actions taken by the Trump administration are potentially leaving their mark. The BLS, one of many federal agencies subject to the Department of Government Efficiency's blunt axe, has increasingly cut back on the data collection that feeds into the critical pricing gauge. The geographic and sample cuts that have taken places since April aren't expected to massively affect the overall annual CPI rates; however, they could make the monthly data even more volatile, economists say. The next big piece of inflation data is due out Thursday when the BLS releases the Producer Price Index, which will provide a look at how prices are changing upstream of the consumer.
Yahoo
17-07-2025
- Business
- Yahoo
PNC Q1 Deep Dive: Loan Growth, Tariff Risks, and New Leadership Shape Outlook
Financial services giant PNC (NYSE:PNC) beat Wall Street's revenue expectations in Q2 CY2025, with sales up 6.7% year on year to $5.66 billion. Its GAAP profit of $3.85 per share was 8.5% above analysts' consensus estimates. Is now the time to buy PNC? Find out in our full research report (it's free). PNC Financial Services Group (PNC) Q2 CY2025 Highlights: Revenue: $5.66 billion vs analyst estimates of $5.59 billion (6.7% year-on-year growth, 1.3% beat) EPS (GAAP): $3.85 vs analyst estimates of $3.55 (8.5% beat) Market Capitalization: $76.41 billion StockStory's Take PNC's first quarter results for 2025 were met with a cautious market reaction, as management pointed to a mix of moderate loan growth and strong expense control amid a volatile macroeconomic backdrop. CEO Bill Demchak cited uncertainty from proposed tariffs and ongoing industry headwinds as key factors influencing operating conditions. He highlighted customer growth across PNC's franchise, expanding commercial and industrial loan balances, and tight credit quality as positive contributors. However, capital markets activity was softer than anticipated, and management acknowledged that fee income faced pressure from lower advisory and trading revenues. 'It is still very early, and the fluidity of the news coming out of Washington makes it difficult to narrow the range of potential outcomes for the broader economy at this point,' Demchak noted. Looking forward, PNC's guidance is shaped by both measured optimism and caution tied to the evolving economic environment. Management expects steady net interest income growth and expense discipline, with expansion markets and product initiatives supporting new customer acquisition. At the same time, CFO Rob Reilly flagged the risk of non-interest income pressure if tariffs dampen client activity, and indicated that further normalization in credit costs is likely as commercial real estate charge-offs fluctuate. Demchak reaffirmed that the bank will 'continue to focus on the things we can control,' emphasizing technology investments and organic growth opportunities while monitoring regulatory developments and potential shifts in monetary policy. Key Insights from Management's Remarks Management attributed quarterly results to modest C&I loan growth, disciplined expense management, and the impact of seasonality and market volatility on capital markets activities. Commercial loan growth returns: PNC saw 3% growth in commercial and industrial (C&I) loans, driven by broad-based client demand and higher utilization rates. Management indicated that while some loan draws could be precautionary amid tariff uncertainty, most reflected organic working capital needs. Capital markets softness: Fee income from capital markets and advisory services declined due to lower M&A and trading activity. However, pipelines for deal advisory remain robust, with Harris Williams' pipeline up nearly 20% year-over-year, suggesting potential for recovery if market conditions stabilize. Expense discipline: Non-interest expenses were well controlled, declining sequentially as PNC continued to execute its $350 million cost reduction program for 2025. Management stressed that ongoing efficiency efforts help fund technology and business investments even as overall expenses rise modestly. Credit quality remains solid: Non-performing loans and charge-offs remained stable, with the decline in commercial real estate office charge-offs attributed to the timing of loan resolutions. The allowance for credit losses includes additional reserves to reflect heightened tariff-related risks, though management sees the environment as too uncertain for major estimate changes. Leadership transition and strategy continuity: The appointment of Mark Wiedman as President brings deep industry expertise, but management emphasized there will be no change to PNC's strategy. Demchak described the addition as 'adding skill sets to what we're doing today,' with a focus on enhancing execution rather than pursuing new lines of business. Drivers of Future Performance Looking ahead, management's outlook is anchored by net interest income growth, disciplined expense management, and cautious monitoring of tariff impacts on client behavior and non-interest income. Tariff-driven uncertainty: Proposed tariffs are a key variable for the remainder of 2025, with management warning that prolonged implementation could increase recession risk and dampen non-interest income. The bank's guidance assumes stable loan demand, but leadership signaled that client activity could slow as businesses adjust to evolving trade policy. Expense and margin management: PNC expects to maintain positive operating leverage through continued cost reduction initiatives, while targeting a net interest margin approaching 3% by year-end. Investments in technology and efficiency are expected to partially offset inflationary pressures. Expansion market momentum: Growth in new geographic markets and continued success of recent product launches are expected to drive both deposit and loan growth. Management highlighted that customer acquisition and net inflows in wealth management are increasingly sourced from these expansion markets, supporting PNC's nationwide strategy. Catalysts in Upcoming Quarters In the quarters ahead, our analyst team will watch (1) whether loan growth in commercial and expansion markets can be sustained amid economic uncertainty; (2) if non-interest income stabilizes as capital markets activity and client sentiment react to tariff developments; and (3) how effectively PNC maintains expense discipline while investing in technology and business growth. We will also monitor any regulatory changes that could impact capital and buyback flexibility. PNC Financial Services Group currently trades at $192.75, in line with $192.12 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it's free). Our Favorite Stocks Right Now Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. 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
Associated Press
09-07-2025
- Business
- Associated Press
Doing Right, A Brilliant Way to Do Business: PNC 2024 Corporate Responsibility Report is Here
A message from PNC Chief Corporate Responsibility Officer Richard BynumPNC has long been an engaged and responsible company, rooted in the belief that meaningful relationships are built and strengthened through honest and transparent dialogue and action. Our guiding principle across all our businesses is to do right by our customers, employees, shareholders and the communities we serve. With a theme of 'Doing right is a brilliant way to do business,' the 2024 PNC Corporate Responsibility Report provides valuable insight into our measurable impact and reflects our commitment to strengthen the trust of our stakeholders by managing our business with integrity, transparency and accountability. We know that a strong foundation in governance and risk management helps drive our company's success and positive reputation. Key 2024 highlights include: None of PNC's achievements would be possible without the talent and commitment of my 55,000-plus colleagues who are focused on delivering for our stakeholders every day. Thank you for your contributions that make PNC a dependable neighbor, company and employer. Collectively, will continue to focus on running our business reliably, with integrity and in service of our Contact:Heidi Barker, Director, Corporate Responsibility Communications Read More Visit 3BL Media to see more multimedia and stories from PNC Financial Services Group
Yahoo
03-06-2025
- Business
- Yahoo
The PNC Financial Services Group Announces Second Quarter Conference Call Details
PITTSBURGH, June 3, 2025 /PRNewswire/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) expects to issue financial results for the second quarter 2025 at approximately 6:30 a.m. (ET), Wednesday, July 16, 2025, as previously announced. PNC Chairman and Chief Executive Officer William S. Demchak and Executive Vice President and Chief Financial Officer Robert Q. Reilly will hold a conference call for investors the same day at 10 a.m. (ET). Dial in numbers are (866) 604-1697 and (215) 268-9875 (international). The following will be accessible at a link to the live audio webcast on the day of the conference call; presentation slides, earnings release and supplementary financial information; and a webcast replay available for 30 days. A telephone replay of the call will be available for 30 days at (877) 660-6853 and (201) 612-7415 (international), Access ID 13753957. The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit CONTACTS MEDIA: Kristen Pillitteri(412) INVESTORS: Bryan Gill(412) View original content to download multimedia: SOURCE The PNC Financial Services Group, Inc. Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
PNC Executives to Speak at Morgan Stanley US Financials Investor Conference
PITTSBURGH, May 28, 2025 /PRNewswire/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) announced today that Chairman and Chief Executive Officer William S. Demchak and Executive Vice President and Chief Financial Officer Robert Q. Reilly will discuss business performance and strategy at 1:45 p.m. (ET) Wednesday, June 11, at the Morgan Stanley U.S. Financials Conference in New York City. The following will be accessible at a link to the live webcast; related materials, including cautionary statements regarding forward-looking information, available prior to the start of the webcast; and a webcast replay available for 30 days. The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit CONTACTS MEDIA: Kristen Pillitteri(412) 762-4550 INVESTORS: Bryan Gill (412) 768-4143 View original content to download multimedia: SOURCE The PNC Financial Services Group, Inc. 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
