- Weekly unemployment benefits reduced from 9,000 to 376,000
- May’s consumer price index increases 0.6%
- The consumer price index increases by 5.0% year on year
- Core CPI will increase 0.7%. 3.8% increase over the previous year
Washington, June 10 (Reuters) -Consumer prices in the United States rose steadily in May as the economic recovery boosted demand for travel-related services, while global semiconductor shortages pushed prices up used cars.
Grips of pandemic economic easing, other Labor Department data showed on Thursday, shows the number of Americans filing new jobless claims fell to the lowest level in nearly 15 months last week. I go.
Vaccination against COVID-19, trillions of government dollars and record interest rates are boosting demand as companies compete for raw materials and labor. Used cars and trucks accounted for about a third of the rise in consumer inflation last month. This reflects a global semiconductor shortage lower than automotive production.
Inflation factors in May appear to be temporary, according to Federal Reserve Chairman Jerome Powell, repeatedly saying the rise in inflation is temporary.
Chris Lowe, chief economist at FHN Financial in New York, said: “Some of the economies that contribute the most to inflation in April and May have undergone short-term adjustments that we can understand, or are just at the level.” normal ”. I’m back. “Areas not affected by the pandemic are dampening the rise in the CPI, but this report confirms that demand exceeds supply. “
The consumer price index rose 0.6% last month after rising 0.8% in April, the largest increase since June 2009. Food prices rose 0.4%, but gasoline fell for the second consecutive month. In the 12 months ending in May, the CPI accelerated 5.0%. This was the largest year-on-year increase since August 2008, followed by a 4.2% increase in April.
The jump partly reflects a small drop in reading last spring of the calculation. May is probably the peak of the CPI, and these so-called base effects should stabilize in June. Economists polled by Reuters predicted that the CPI in May would rise 0.4%, up 4.7% year-on-year.
Excluding volatile foods and energy components, the CPI rose 0.7% after increasing 0.9% in April. The core CPI was boosted by a 7.3% increase in prices for used cars and trucks. The prices of new cars have also increased significantly.
In the United States, at least half of the adult population is vaccinated against COVID-19 and Americans travel.
Car rental prices in May rose 12.1%. Airline tickets and hotel accommodation costs have also increased.
Consumers paid more for auto insurance, furniture and bedding, rent, and clothing. However, they got some relief from lower medical costs.
The core CPI rose 3.8% in the 12 months to May, the biggest increase since June 1992. The Fed suggests it can resist the rise in inflation for some time to offset the years when inflation is below its 2% target. ..
The central bank’s recommended inflation index, the consumer price index, excluding the volatile component of food and energy, rose 3.1% in April, the largest increase since July 1992. We finance the economy through monthly bond purchases.
“Numbers like today’s CPI will certainly be frowned upon by the Fed, but the bottom line is that more evidence will likely be needed to determine if it is rising. Inflationary pressure Charlie Ripley, senior investment strategist at Allianz Twin Investment Management, said.
US stocks rose on the S&P 500 (.SPX) It ended with a record. The dollar is stable against a basket of currencies. US Treasury yields have fallen.
Mitigation of layoffs
Inflation could be stimulated by the labor market, where layoffs have declined. Employers are raising wages in search of labor shortages, have problems securing child care, have plentiful unemployment benefits and are concerned about the virus despite widespread availability of vaccines. Millions of unemployed people are staying at home because of the extension.
In another report released Thursday, the Labor Department said the state’s first claim for unemployment benefits had been reduced by 9,000 to the seasonally adjusted 376,000 for the week ending June 5. It was the lowest since mid-March 2020, when the first wave of COVID -19 infection passed through. The country leads to the closure of unimportant businesses.
Complaints declined for the sixth week in a row. The drop in requests was led by California and Pennsylvania.
Although layoffs have declined, complaints are still well above the 200,000 to 250,000 range and appear to reflect a healthy labor market. However, it has declined from the record 6.149 million at the start of April 2020.
Claims could be further reduced as Republican governors in at least 25 states, including Florida and Texas, ended federally-funded unemployment programs for residents since Saturday.
These states represent about 40% of the economy. The benefits of early termination include a weekly unemployment allowance of $ 300. Businesses say this discourages unemployed people from looking for work.
The number of people who continued to receive benefits after the first week of aid fell from 258,000 to 3.5 million in the week ending May 29. These renewal requests have been stuck between 3.6 and 3.8 million since mid-March. , and workers have re-entered the labor market.
In the week ending May 22, at least 15.3 million people received unemployment benefits for all programs. Despite 7.6 million jobs, which fell below the peak of February 2020, a labor shortage helped push wages up in May. The economy has a record 9.3 million unemployed.
Esfer Munir, economist at Citigroup in New York, said:
Report by Lucia Mutikani; edited by Dan Burns and Andrea Rich
Our criteria: Thomson Reuters Trust Principles.
The recovery in the US economy is heating up inflation. The recovery of the labor market is gaining momentum
Source link The recovery in the US economy is heating up inflation. The recovery of the labor market is gaining momentum