Economists characterized last week’s increase as most likely a blip caused by some one-time factors and partly a result of the inevitable bumpiness in the week-to-week data.
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Nine of 13 retail categories posted increases in June sales, including solid gains at electronics and appliance outlets, clothing stores and restaurants.
Last month, employers added a hefty 850,000 jobs, and hourly pay rose a solid 3.6% compared with a year ago—faster than the pre-pandemic annual pace and evidence that companies are being compelled to pay more to attract and keep workers.
The Federal Reserve said Wednesday that seven of its 12 regional bank districts reported strong price increases with some businesses expressing concerns that the supply chain disruptions would push prices even higher.
Federal Reserve Chairman Powell reiterated his long-held view that high inflation readings over the past several months have been driven largely by temporary factors.
Nearly 60% of the gain in wholesale prices in June reflected a jump in the cost of services, led by higher margins received by wholesalers and retailers.
The pickup in inflation, which has coincided with the economy’s rapid recovery from the pandemic recession, has heightened concerns that the Federal Reserve might feel compelled to begin withdrawing its low-interest rate policies earlier than expected.
The discussions, revealed in the minutes of the Fed’s June meeting released Wednesday, indicate that the Fed is moving closer to tapering those purchases, even though most analysts don’t expect a reduction until late this year.
There are signs that people are re-evaluating their work and personal lives and aren’t necessarily interested in returning to their old jobs, particularly those that offer modest wages.
In terms of inflation, which is the bogeyman for investors right now, a big and sustained gain in wages would be even more dangerous than the price spikes already seen for oil and other commodities.
June was the 13th consecutive month manufacturing has grown after contracting in April 2020, when coronavirus fears triggered business shutdowns across the country.
Last week’s drop in jobless claims nationally was steeper than economists had expected. Applications for unemployment benefits have now fallen in 10 of the past 12 weeks.
The proportions of consumers planning to purchase homes, automobiles and major appliances all rose in June, as did intentions to take vacations.
The Labor Department said Thursday that jobless claims declined by 7,000 from the previous week, to 411,000. The number of weekly applications for unemployment aid has fallen steadily this year, from about 900,000 in January.
Retail workers, drained from the pandemic and empowered by a strengthening job market, are leaving jobs like never before.
The monthly gain in the producer price index, which measures inflation pressure before it reaches consumers, followed a 0.6% increase in April and a 1% jump in March, the Labor Department reported Tuesday.
Retail sales fell in May, dragged down by a decline in auto sales and a shift by Americans to spend more on vacations and other services instead of goods.