Inflation likely hit fever pitch in June with consumer prices surging again
Inflation has already done its damage to Wall Street: Expert
Hodges Funds portfolio manager Craig Hodges discusses if Wall Street is rooting for recession on ‘Making Money.’
Economists are searching for evidence that inflation has finally peaked, but they are unlikely to find much good news in the newest consumer price index report out on Wednesday, which is expected to show that prices ran at the hottest pace since 1980 in June.
Economists expect the gauge, which measures a basket of goods including gasoline, health care, groceries and rent, to show that prices surged 8.8% in June from the previous year – toppling the previous 40-year high of 8.6% notched in May. On a monthly basis, inflation is projected to have increased 1%, matching the rate from the previous month.
Inflation is rapidly diminishing the buying power of Americans, eroding strong wage gains that workers have seen in recent months. The spike in prices has also become a political liability for President Biden, who has seen his approval rating slump in conjunction with rising costs.
The White House is already in damage control mode ahead of the newest inflation data, with officials publicly bracing for another grim reading after months of publicly downplaying rising costs.
IS THE US ECONOMY ON THE BRINK OF RECESSION? FED GDP TRACKER SAYS YES
People shop for produce at a store in Rosemead, California on June 28, 2022. – Americans’ feelings about the economy slumped further in June after falling sharply the month before amid concerns over skyrocketing inflation, according to a survey relea ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images) Although Biden officials have not suggested that inflation peaked in June, they have argued that record-high gas prices are to blame for what will likely be another scorching-hot CPI reading — while noting that prices at the pump have since declined. "Energy prices have fallen significantly from the prices included in the June CPI report," Brian Deese, the director of the National Economic Council, and Cecilia Rouse, the chair of the Council of Economic Advisers, wrote in a White House memo released on Tuesday. "The June CPI data will largely not reflect the substantial declines in gas prices we’ve seen since the middle of June." Administration officials are increasingly trying to contain voter outrage over runaway consumer prices by stressing that President Biden is maximizing efforts to bring down inflation ahead of the November midterms, which could be a bloodbath for Democrats. Biden is expected to visit the Port of Los Angeles after the release of the latest data on Friday, during which he's expected to highlight efforts to reduce prices. WASHINGTON, DC – MAY 10: U.S. President Joe Biden speaks about inflation and the economy in the South Court Auditorium on the White House campus May 10, 2022 in Washington, DC. (Getty Images / Getty Images) The president has blamed higher prices on supply chain bottlenecks and other pandemic-induced disruptions in the economy, as well as the Russian war in Ukraine. Most economists now agree that unprecedented levels of government stimulus, and a stronger-than-expected recovery from the pandemic, have also played at least some role in exacerbating the price spike. The report will also have major implications for the Federal Reserve, which is tightening policy at the fastest rate in decades as it tries to cool consumer demand and reduce out-of-control inflation. Policymakers raised the benchmark interest rate by 75-basis points last month for the first time since 1994 and have confirmed that a similarly sized increase is on the table in July. If the data comes in hotter than expected, it could raise the odds of an even steeper rate hike this month and a more aggressive central bank. GET FOX BUSINESS ON THE GO BY CLICKING HERE Source: Read Full Article
