Last Week: 1.64%%
YTD: 11.74%
1 Year: 28.32%
Dow Jones Industrial Average
Last Week: 1.54%
YTD: 6.82%
1 Year: 21.92%
Last Week: 1.81%
YTD: 11.20%
1 Year: 33.20%
Last Week: 1.63%
YTD: 3.93%
1 Year: 19.78%
YTD: 13.32%
1 Year: 35.71%
YTD: 8.91%
1 Year: 20.77%
Wholesale Prices
The producer price index, a measure of wholesale prices, increased by 0.5% in April. This was up 2.2% from a year ago and the largest increase in a year. This gain was above the expected increase by analysts. Core PPI, which removes more volatile food and energy prices, was also up 0.5%, compared to the estimated 0.2%. We continue to see conflicting inflation data, but one thing we can agree on is inflation has been very sticky.
Consumer Price Index
Contrasting the PPI numbers, the consumer price index (CPI) showed inflation slowed in April for prices paid for goods and services by consumers. The CPI report showed an increase of 0.3% in April. On an annual basis, CPI increased 3.4%, which was in line with analysts expectations. The major US stock indices reacted favorably to the inflation report, posting large gains last Wednesday. The largest increases in the inflation data came from shelter and energy. Shelter costs have been one of the largest headaches for the Fed as they have been looking to cut rates but have been unable to do so. Shelter prices were up 5.5% from a year ago.
Selective Spending
The latest round of earnings reports has shown consumers have started to become more selective with where they are spending their hard-earned money. Companies such as McDonalds and PepsiCo have warned on their earnings call they have begun to lose lower-end consumers and have adjusted their forecasted earnings because of this. Walmart, on the other hand, posted record earnings and stated this, in large part came from the grocery side of their business. Instead of lower-income households eating fast food, they have been opting to cook meals at home to save money. Other companies like Chipotle and Delta Airlines have grown revenue thanks to having a higher income demographic of consumers. It is not surprising that lower-income households have been the most affected by inflation and are experiencing that pinch more than ever.
