By: Gerry sparrow
Sometimes, a picture is worth 1,000 words. So I decided to include an image of the June Consumer Price Index (CPI) report to help put inflation in better perspective:
Core CPI, which excludes volatile food and energy prices, rose just 0.16 percent for the month, the lowest reading in more than two years and a significant downside break. There are a number of reasons why it was such a big deal, including:1
- It was a downside surprise compared to the consensus estimate of 0.30%.
- On a YoY basis, 0.16% translates to 1.92% inflation on an annual basis. Whoa!
- It may give the Fed some flexibility with interest rates in the second half of 2023.
- June’s Producer Price Index, released the day after the June CPI report, rose less than expected, building on the optimism about inflation.
I don’t put too much weight on individual reports, so at this point, I’m looking for more information before drawing any conclusions about the economy, inflation, and interest rates.
Also, inflation is tricky, and people can have different experiences with rising prices depending on their spending habits.
1. CNBC.com, July 13, 2023. “S&P 500 rises for a fourth day on more encouraging inflation data.”
PHOTO CREDIT https://www.shutterstock.com/g/rozbyshaka
Via SHUTTERSTOCK
Disclosure:
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
