United States Inflation Update

Written by Philip Rich, Chief Investment Officer,  June 10, 2022.

The U.S. Consumer Price Index (CPI), released by the U.S. Bureau of Labor Statistics on June 10, hit a fresh high in May at 8.6% (YOY), surprising many observers who had expected a break to the downside. Food and energy remain the strongest drivers of inflation: energy is up 34.6% and food is up 10.1% over the same period. Inflation remains at a 40-year high. Core inflation (less food and energy) has trended down to 6.0% from its peak of 6.5% in March. Nothing in the May report will motivate any slowdown in the Federal Reserve’s plan to tamp down inflation with higher interest rates.
 

US inflation hits new high of 8.6% in May.

• Energy up 34.6% (YOY), gasoline up 48.7%, some heavy fuels up over 100%

• Food up 10.1%, groceries up 11.9%

• New and used vehicles up 12.6% and 16.1% respectively

• Core inflation (less food and energy) down slightly to 6.0%

• Nothing in report to motivate change in trajectory for aggressive Fed tightening

• Early market reaction; stocks and bonds down; bond yields up