Stocks falling from records and inflation is surging
Kadina Group President Gary B. Smith joins ‘Fox Business Tonight’ to discuss the latest on inflation: ‘it’s only going to get worst’
Producer prices accelerated by the most on record in June as the reopening of the U.S. economy continued to gain momentum.
The producer price index for final demand rose at a 7.3% annual pace, ahead of the 6.8% pace that was expected and up from a 6.6% increase in May. The reading was the hottest since recordkeeping began in November 2010.
LUMBER PRICE PLUNGE A HEAD FAKE, CRISIS FAR FROM OVER
Prices increased 1% in June, accelerating from a 0.8% increase in May and a 0.6% increase in April, the Labor Department said Wednesday. Analysts surveyed by Refinitiv had expected a 0.6% increase.
Seventy percent of the increase was attributable to margins for final demand trade services, which jumped 2.1%. Twenty percent of that gain was due to margins for automobiles and automobile parts retailing, which increased 10.5%.
Prices for final demand goods rose 1.2% in June following a 1.5% increase in May.
Core prices, which exclude food and energy, rose 1% in June and 5.6% annually. The year-over-year increase was the largest since the data series began in August 2014.
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The annual data has a "base effects" skew as a result of the price decline that occurred at the beginning of the pandemic.
The recent price increases have investors questioning whether the Federal Reserve will need to taper its asset purchase program and hike interest rates sooner than expected. The central bank is planning to first raise interest rates in 2023.
In his testimony on Capitol Hill on Wednesday, Fed Chairman Jerome Powell reiterated his belief that the recent bout of inflation will be temporary and that the central bank expects to hold rates near zero "for some time."
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