There are a series of indicators that the slowdown in inflation in the U.S. is getting steep. The U.S. Department of Labor announced on the 13th (local time) that the Producer Price Index (PPI) rose 0.1% in June from the previous month and 0.1% from the same month last year, respectively.
The year-on-year growth rate is the smallest since August 2020. It is also the result of a significant reduction in the increase from May (0.9%).
Compared to the previous month, the growth rate fell below the expert forecast (0.2%) compiled by the Wall Street Journal (WSJ).
US Inflation Slowdown … Producer prices in June, the smallest width in three years, 0.1% ↑
Core PPIs, excluding energy and food, rose 0.1% from the previous month and 2.6% from the same month last year, respectively. The core PPI is the smallest year-on-year increase since February 2021.
Following the announcement the previous day that the Consumer Price Index (CPI) rose 3.0% in June from the same month last year, falling short of market forecasts, indicators showed that the U.S. inflation is easing.
These indicators show that U.S. inflation is slowing faster than expected, according to U.S. media.
In particular, the rapid slowdown in wholesale prices, known to precede consumer prices to some extent, is expected to be good news for the U.S. Federal Reserve (Fed), which focuses on fighting inflation first.
However, given that it is not certain whether this trend will continue, it is widely expected that it will not affect the decision to raise interest rates in July.
Market experts’ voices are growing over whether to raise further in the future, but the Fed is determined to make a decision while carefully observing future data.
The Fed is said to be most concerned about the possibility that rising wages due to overheating in the labor market will fix inflation.
In fact, the Ministry of Labor announced that the number of new unemployment benefits claims last week (July 2-8) was 237,000, down 12,000 from the previous week.
This is the result of breaking the market outlook that the number of claims will increase to 250,000 cases.
The number of “continued unemployment benefits” claims for at least two weeks increased slightly to 1.73 million, but this is counted as of two weeks ago.