The Consumer Price Index rose 0.1% in July from June. CPI headline inflation is now running at a 1.7% annual rate, below the Federal Reserve’s target of 2% inflation. The core inflation rate, which excludes food and energy prices, rose 0.1% in July and is also up 1.7% year over year.
A day after Federal Reserve chair Janet Yellen boosted markets with her worries about slow inflation, the Bureau of Labor Statistics released numbers on inflation at the producer level–otherwise known as wholesale inflation–that showed inflation is weak but not totally absent. The Producer Price Index rose at a 2% annual rate in June.
It’s not much to hang a rally on, but the Treasury and stock markets moved up after Fed chair Janet Yellen told the House Financial Services Committee today that “the federal funds rate may not have to rise all that much further to get to a neutral policy stance.”
The U.S. economy added 222,000 jobs in June. That was a big increase from the 152,000 jobs added in May, which was itself an upward revision from the initially reported 138,000. (And remember how disappointing that was.) Economists surveyed by Briefing.com had expected the economy to add 173,000 jobs. The unemployment rate actually ticked higher in June to 4.4%
My overall conclusion: This morning the market is looking at solid numbers on the growth side and weak inflation growth. If there is any conclusion to be drawn from one month’s numbers, it’s that the Federal Reserve, looking at this data, won’t see any reason to rush ahead with another interest rate increase.
On Friday, the government released the May jobs report: The U.S. economy added just 138,000 jobs, far less than the 180,000 expected by economists
