Latest news with #PersonalConsumptionExpendituresPriceIndex
Axios
2 days ago
- Business
- Axios
Trade threats consume the U.S. economy
An upbeat inflation report on Friday was overshadowed by President Trump's warning about escalating U.S.-China trade tensions. Why it matters: Little captures the rattled state of the American economy like the morning's sequence of events. Inflation kept decelerating in April, defying gloomy warnings about tariff-related price hikes. But Trump's social media post about China, pushed out minutes before the data hit the tape, was a clear reminder that the economy is largely at the mercy of the White House's trade agenda. By the numbers: The Personal Consumption Expenditures Price Index — the Federal Reserve's preferred inflation gauge — was benign for yet another month. After a streak of hot reports, the economy looks to be solidly back on a disinflationary path. The core measure that excludes food and energy increased 2.5% from a year ago, the lowest annual gain since February 2021. By another measure, core PCE rose at a 2.7% annualized rate over the last three months — down sharply from 3.5% in March. What to watch: So far, Trump's trade drama has played out against a largely favorable economic backdrop. But spending data released with the upbeat inflation figures offers an early warning that this backdrop might be shifting. Personal consumption expenditures rose 0.2%, a pullback from the 0.7% increase in March. Spending on services was partially offset by a drop in goods purchases. That is despite another jump in disposable income, which rose 0.8% last month, up from the 0.7% increase in March. The Commerce Department said that jump largely reflected new legislation that allowed certain public sector employees to receive more Social Security benefits. The personal saving rate soared by 0.6 percentage point to 4.9%, as consumers socked away more of their income than they spent. What they're saying:"The U.S. consumer remains resilient, though that resilience, to some degree, is underpinned by fear of what's likely to come," Olu Sonola, an economist at Fitch Ratings, wrote in a note Friday morning — referring to tariff-related disruptions. "The Fed will welcome the favorable inflation reading in this report, but they are likely to interpret it as the calm before the storm. They will continue to wait for the storm—unless consumer spending buckles and the unemployment rate rises rapidly," Sonola added. State of play: Trump implemented the steepest tariff rates to date in April before backing off days later. China was the exception, with U.S.-bound goods taxed at 145% for much of April. Economists don't expect price pressures to seep into the data until the summer months. Retailers are rolling through inventory stockpiled before the worst of the tariffs took effect. The bottom line: Even if the courts decide Trump's expansive tariffs are illegal, the White House can implement the levies through other authorities.
Yahoo
2 days ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq futures slip with fate of Trump tariffs, key inflation data in focus
US stock futures edged lower on Friday as legal battles fed a fresh wave of uncertainty around President Trump's tariffs, in the wait for a key inflation reading to provide clues to their impact on the US economy. Futures attached to the Dow Jones Industrial Average (YM=F) slipped 0.1%. Futures attached to the benchmark S&P 500 (ES=F) fell 0.2%. Futures attached to the tech-heavy Nasdaq 100 (NQ=F) dropped 0.3%. A US appeals court on Thursday temporarily paused a ruling from a trade court that had blocked many of Trump's tariffs as illegal just the day before. The pause gives the appeals court time to consider the case, and the Trump administration must file its briefings by June 9. Read more: The latest on Trump's tariffs The White House said it's prepared to go to the Supreme Court if needed and, in the meantime, will explore other ways to implement Trump's tariffs without relying on emergency powers. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy On Friday, Wall Street's attention will turn to the April reading of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE). Any indication of tariffs putting upward pressure on inflation will be in high focus, although many analysts don't expect levies to impact the data until the following month. Overall, stocks this week steadily rose. Highlights for investors included signs of improving prospects of a US-EU trade deal early in the week as well as Nvidia's earnings report on Wednesday. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. 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
3 days ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq futures slip as Trump's tariffs run into legal trouble
US stock futures edged lower as Wall Street absorbed a fresh wave of tariff uncertainty after a federal appeals court reinstated President Trump's global tariffs. Futures attached to the Dow Jones Industrial Average (YM=F) slipped 0.1%. Futures attached to the benchmark S&P 500 (ES=F) fell 0.2%. Futures attached to the tech-heavy Nasdaq 100 (NQ=F) dropped 0.3%. A US appeals court on Thursday temporarily paused a ruling from a trade court that had blocked many of Trump's tariffs as illegal just the day before. The pause gives the appeals court time to consider the case, and the Trump administration must file its briefings by June 9. Read more: The latest on Trump's tariffs The White House said it's prepared to go to the Supreme Court if needed and, in the meantime, will explore other ways to implement Trump's tariffs without relying on emergency powers. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy On Friday, Wall Street's attention will turn to the April reading of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE). Any indication of tariffs putting upward pressure on inflation will be in high focus, although many analysts don't expect levies to impact the data until the following month. Overall, stocks this week steadily rose. Highlights for investors included signs of improving prospects of a US-EU trade deal early in the week as well as Nvidia's earnings report on Wednesday.
Yahoo
3 days ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq futures slip as Trump's tariffs run into legal trouble
US stock futures edged lower as Wall Street absorbed a fresh wave of tariff uncertainty after a federal appeals court reinstated President Trump's global tariffs. Futures attached to the Dow Jones Industrial Average (YM=F) slipped 0.1%. Futures attached to the benchmark S&P 500 (ES=F) fell 0.2%. Futures attached to the tech-heavy Nasdaq 100 (NQ=F) dropped 0.3%. A US appeals court on Thursday temporarily paused a ruling from a trade court that had blocked many of Trump's tariffs as illegal just the day before. The pause gives the appeals court time to consider the case, and the Trump administration must file its briefings by June 9. Read more: The latest on Trump's tariffs The White House said it's prepared to go to the Supreme Court if needed and, in the meantime, will explore other ways to implement Trump's tariffs without relying on emergency powers. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy On Friday, Wall Street's attention will turn to the April reading of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE). Any indication of tariffs putting upward pressure on inflation will be in high focus, although many analysts don't expect levies to impact the data until the following month. Overall, stocks this week steadily rose. Highlights for investors included signs of improving prospects of a US-EU trade deal early in the week as well as Nvidia's earnings report on Wednesday.
Axios
4 days ago
- Business
- Axios
Oil price relief won't offset tariff impact, economists say
Energy prices are plunging, a boost for consumers and businesses alike — and a key White House talking point, too. Why it matters: Lower oil and gasoline prices could offset some of the consumer pain if prices on a slew of other goods go up as a result of the trade wars. But it likely won't be enough to entirely shield the economy from the tariff shock. By the numbers: As of Wednesday morning, it cost roughly $62 for a barrel of crude oil — well below the most recent peak of $80 in early January. Since April, crude prices have plunged by more than $10. That sharp decline in prices reflects expectations for weaker demand as global growth slows. Oil cartel members (and non-members) have also agreed to ramp up production. That has helped push down pump prices for consumers. A White House release showed the lowest average gasoline prices for a Memorial Day weekend since 2021, confirmed by AAA. Yes, but: While those low prices are a go-to political bragging point, it might not be as economically significant. In a recent note, Goldman Sachs economists say that lower oil prices "won't offset much" of the inflationary or growth impact from tariffs. "While lower oil prices will boost real disposable income and real consumer spending, they will also weigh on energy capital expenditures from lower oil prices," Jessica Rindels, an economist at Goldman Sachs, wrote in a recent note. Rystad Energy estimates that oil majors will "likely need to reduce both investment and shareholder payouts" as a result of "recent double-digit dips in oil prices not reversing," according to a note from the energy research firm. Goldman expects the drag from energy firms will cancel out much of the benefits from higher consumer spending. The net effect will be a roughly 0.1 percentage point GDP boost over 2025. State of play: Goldman says the decline in energy prices has already pulled down headline inflation — as measured by the Personal Consumption Expenditures Price Index — by roughly 0.2 percentage points as of March. The energy price relief would spill over into non-energy categories and help drag the core PCE measure down by as much as 0.1 percentage point through the end of the year if oil prices remain at current levels. "But this drag is much smaller than the boost from tariffs, and we therefore expect year-over-year headline PCE inflation to rise from 2.3% currently to 3.3% in December 2025 and 2.7% in December 2026," Rindels wrote. The intrigue: Biden-era inflation was made much worse by Russia's invasion of Ukraine, which led to a surge in energy and gasoline prices.
