13 May Inflation numbers this week
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Yesterday the Consumer Price index rose to 3.8% in April from a year earlier as higher energy costs had an impact for Americans. This is caused by sharp increases in energy costs caused by the war. It was 2.4% in the month in February and 3.3% in March. Energy prices are up 18 percent from a year earlier. Next will be the lack of important goods like feed and fertilizers for farmers. With higher energy costs all food products will go up because of the price of transportation. This increase is greater than hourly earnings increased so inflation is increasing faster than wages. This has caused the personal savings rate to decrease to a low as it was during the pandemic.
Today, Wholesale inflation figures came up, and they jumped 6% and that is the largest increase since 2022. This was much higher than the Dow Jones consensus forecasted. Their report also cited the war now and tariffs last year. Core items like services also had a significant increase.
The market pricing now points to little chance of any interest rate cuts this year and a 39% chance of an interest rate hike.
This is not good news for American consumers and buyers of goods like cars and homes as higher interest rates affect affordability.
Current mortgage rates are now about 6.5% for a conventional loan.
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