ban-israel-trip
logo
logo

Stocks Tumble as New Inflation Numbers Come in Significantly Higher Than Expected

Stock futures fell as Treasury yields and the U.S. dollar rose Wednesday morning after the Bureau of Labor Statistics released a report showing that inflation rose by higher-than-expected numbers in June. The Consumer Price Index — a measure of inflation that accounts for the average prices of typical goods and services households purchase — rose by 1.3 percent in June, according to a Wednesday news release from the Bureau of Labor Statistics. Over the past 12 months, the CPI rose by 9.1 percent without seasonal adjustment, according to the Bureau of Labor Statistics, marking a new 40-year high in inflation since 1981. “The increase was broad-based, with the indexes for gasoline, shelter and food being the largest contributors,” the Bureau of Labor Statistics said. In June, prices for energy rose by 7.5 percent and comprised nearly half of the CPI increase, with gasoline, in particular, rising by 11.2 percent. “The food index rose 1.0 percent in June, as did the food at home index,” the Bureau of Labor Statistics said. “Grocery prices increased 12.2 percent in June from a year earlier, the largest increase since April 1979. Costs for butter and margarine, fruits and vegetables and cereals all rose briskly,” Sarah Chaney Cambon of the Wall Street Journal said. Excluding price increases in food and energy, the CPI rose by 0.7 percent in June, according to the Bureau of Labor Statistics, marking a 0.1 percent rise from 0.6 percent in April and May. “While almost all major component indexes increased over the month, the largest contributors were the indexes for shelter, used cars and trucks, medical care, motor vehicle insurance and new vehicles,” the Bureau of Labor Statistics said. According to Bloomberg, economists expected a 1.1 percent rise in the CPI from May and an 8.8 percent over-the-year rise. However, the Wednesday figures exceeded their expectations. In response to the new figures, the yield on the 10-year U.S. Treasury note rose to 3.037 percent Wednesday from 2.958 percent on Tuesday, the Wall Street Journal reported. According to the Wall Street Journal, the yield on the two-year note rose to 3.163 percent Wednesday from 3.043 percent on Tuesday. As for stock futures, S&P 500 declined by 1 percent, and the Dow Jones Industrial Average fell by 1.2 percent or approximately 360 points, the Wall Street Journal reported. The Nasdaq Composite fell by 0.9 percent. The Wednesday figures put more pressure on the Federal Reserve, Democrats and President Joe Biden to continue the fight against inflation. The Federal Reserve on June 15 raised the target range for the federal funds rate to between 1.5 percent and 1.75 percent, marking the largest interest rate hike since 1994. Bloomberg reported that policymakers at the central banking system have signaled another 75 basis-point increase in interest rates in the upcoming weeks. This article appeared originally on The Western Journal.

Related Articles

Support His Glory

His Glory Newsletter

This field is for validation purposes and should be left unchanged.