- Global Stocks at a record high of 21 Months
- Futures flat
- US Inflation Rate At Near 5-Year High Of 2.5%
US economic data have just hit the wires and moved the markets. US inflation rate has hit 5 year high last month, jumping from 2.1% to 2.5%
On a monthly basis, prices rose by 0.6% – twice as fast as expected – as households paid more for petrol ( gasoline) and food.
Retail sales have also smashed forecasts, growing by 0.4% last month – or 0.8% if you exclude automobile sales.
Compared with the same month last year, costs paid by Americans for goods and services rose 2.5 percent, the most since March 2012.
Higher prices for gasoline, apparel and new cars show cost pressures are building as steady demand provides some companies with pricing power. The figures underscore Federal Reserve Chair Janet Yellen’s congressional testimony on Tuesday that more interest-rate increases will be appropriate if inflation picks up and the labor market remains tight.
Wednesday’s report from the Labor Department showed energy costs increased 4 percent from a month earlier. Food prices rose 0.1 percent.
The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60 percent of the index covers prices consumers pay for services from medical visits to airline fares, movie tickets and rents.
Some details from the report:
- The food index rose 0.1 percent in January, its first increase since April 2016.
- The energy index rose 4.0 percent in January, its fifth straight increase. The gasoline index continued to rise, increasing 7.8 percent.
- The shelter index rose 0.2 percent in January
- The index for new vehicles rose 0.9 percent, its largest increase since November 2009.
- The medical care index also rose in January, increasing 0.2 percent.
- …But more importantly, real wages are collapsing:
As does Industrial Production: Tumbles Most In 10 Months
“Warm weather” meant a drop in output from utilities, offsetting rises in manufacturing and mining. So the Federal Reserve’s industrial production index dipped 0.3% compared to expectations that it would remain flat. In December the index showed a rise of 0.6%, itself marked down from an initial reading of 0.8%.
European banking shares advanced the most three weeks, tracking peers in the U.S., as the prospect for tighter monetary policy boosted the profit outlook for lenders who’ve been contending with near-zero rates for years.
- The yield on 10-year Treasuries held at a two-week high.
- Copper climbed amid stoppages at the biggest mines
- . Financials also led the way in Europe, with Credit Agricole up more than 3 percent after France’s biggest retail bank beat forecasts with a smaller than expected earnings drop in the fourth quarter.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7 percent, rising to its highest since July 2015. Japan’s Nikkei added more than 1 percent, buoyed by a weaker yen.