Last Week: 1.33%
YTD: 14.55%
1 Year: 24.84%
Dow Jones Industrial Average
Last Week: –0.73%
YTD: 3.22%
1 Year: 14.54%
Last Week: 2.80%
YTD: 17.95%
1 Year: 30.55%
Last Week: -1.29%
YTD: –0.46%
1 Year: 8.36%
YTD: 20.14%
1 Year: 34.35%
YTD: 5.57%
1 Year: 12.90%
Inflation Slows in May
The consumer price index showed no increase in inflation in May. The CPI inflation gauge that measures a basket of goods and services held flat last month but overall was up 3.3% from a year ago. Economists had been expecting a gain of 0.1% on the month and up 3.4% from a year ago; it was good to see it come in under expectations. Housing remains the sticking point for inflation, which increased 0.4% from April. Energy was the biggest drop in inflation, declining 2% in the month.
Wholesale Prices Drop Unexpectedly
A surprising drop in wholesale prices in May was very unexpected. Analysts had estimated a gain of 0.1% last month, but instead we saw wholesale prices drop 0.2%. The producer price index measures prices that producers receive for their goods and services in the open market. It can be a leading indicator of inflation; as prices decline for producers, it tends to trickle down to consumers. Following the report, we saw modest gains in the stock market, and Treasury yields fell on the day.
The Fed Notes
The U.S. Federal Reserve concluded its two-day meeting last week. Unsurprisingly, they have held interest rates steady. This will push the start of potential rate cuts to later this year. The inflation data also released last week did show improving signs of consumer prices, though they remain above the Fed’s long-term target. The new projections show only one rate cut in 2024, which is down from the projected three rate cuts following the Fed’s notes from March. Households have started to bend but have not yet broken, as spending is still keeping economic growth at a modest pace. We are seeing signs of shifting spending habits among consumers.
