By Arlenys Tabare
According to data published this Thursday by the Department of Labor, the Producer Price Index (PPI) in the United States increased to 6.5%, which suggests an increase of 1.1% compared to the previous month, this amid one of the highest interannual inflation levels in three years and higher energy costs.
This Wednesday, the Bureau of Labor Statistics (BLS) reported that the Consumer Price Index rose 0.5% over the past month, placing the inflation rate at 4.2% year-on-year from the 3.8% registered in April.
For Elizabeth Renter, senior economist at NerdWallet, “in determining the direction of monetary policy, the Federal Reserve considers today’s wholesale inflation figures as one more piece of the puzzle. The likelihood of a rate hike in the coming months has increased with this week’s consumer and wholesale inflation data, But the most likely thing is that the Federal Reserve will wait another month before taking that measure.”
In recent months, Inflation had declined and was inching closer to the Fed’s 2% target; However, economic uncertainty and the development of the war in Iran, which caused the closure of the Strait of Hormuz and the increase in oil and gasoline prices, have stimulated a dizzying increase in the inflation rate in recent weeks.
For her part, Grace Zwemmer, US economist at Oxford Economics, noted that “with May CPI and PPI data in hand, our short-term PCE forecast points to a 0.5% increase in headline prices and a 0.3% rise in core prices in May. This would push headline PCE up to 4.2%, its highest level since April 2023,” she said.
According to the Department of Labor report, Basic wholesale prices (food and energy) increased by 0.4% in May and 4.9% year-on-year, while wholesale gasoline prices skyrocketed 23% in the last month and 70% in the 12 months.
Next Wednesday, June 17, the Federal Reserve meeting will be held, where the decisions on interest rates will be known, which until now remain in the range of 3.50%.
Keep reading:
- 172,000 jobs created in the United States in May, more than expected
- US jobless claims rise to highest level since war with Iran began
- 3 Ways to Pay Off Credit Card Debt in the Face of Rising Inflation, According to Experts
- American households are paying up to $450 in additional expenses since the war with Iran began
