Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% Upgrade now

'Inflation's Momentum Is Still Strong': Experts React To 8.3% CPI Inflation, Higher Than Expected

Stock Markets May 11, 2022 15:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. 'Inflation's Momentum Is Still Strong': Experts React To 8.3% CPI Inflation, Higher Than Expected

The SPDR S&P 500 ETF Trust SPY (NYSE: NYSE:SPY) traded lower by 0.6% on Wednesday morning after the Labor Department reported an 8.3% increase in the consumer price index in the month, indicating inflation remains near 40-year highs.

What Happened: The headline CPI rose 8.3% in April, down slightly from 8.5% in March but above economist estimates of 8.1%. Prior to 2022, the CPI hadn't risen 8.3% in any month since 1982.

Core inflation, which excludes volatile food and energy prices, was up 6.2% in April, above economist estimates of a 6% gain.

Food prices were up 0.9% month-over-month and 9.4% compared to a year ago. Energy prices were down 2.7% in April but up 30.3% over the past 12 months. Used car prices dropped 0.4% on a monthly basis but remain up 22.7% from a year ago.

The latest CPI inflation reading comes after the Labor Department reported earlier this month that U.S. wages grew 5.5% year-over-year in April. Unfortunately, the latest inflation numbers suggest prices are rising faster than wages for many Americans.

Related Link: Despite Recession Fears, This Indicator Says The US Economy Is Booming

Voices From The Street: Jeffrey Roach, Chief Economist for LPL Financial, said the first month-over-month drop in CPI inflation may be an important psychological turning point for consumers.

"April data will not likely change expectations that the Federal Open Market Committee (FOMC) will hike by 50 basis points at their next meeting on June 14-15," Roach said.

Bill Adams, Chief Economist for Comerica Bank, said the CPI slowdown was driven by falling gasoline and used car prices, but inflation is likely to continue to overshoot the Federal Reserve's target range through the end of 2023.

"But sticky services prices continued to rise rapidly in April, evidence that inflation’s momentum is still strong," Adams said.

Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, said the April inflation numbers were disappointing, removing a potential catalyst for a stock market rally.

"There will be at least four 50 bps rate hikes this year and not three or less, and we would continue to be cautious with risk assets," Zaccarelli said.

Joseph Brusuelas, principal and chief economist for RSM US LLP, said peak inflation doesn't provide much comfort to American consumers.

"While inflation in this business cycle likely reached its zenith in March as transportation prices and other industrial goods declined relative to year ago levels resulting in an easing of topline inflation from 8.5% last month to 8.1% in April, one does not get the sense that this is going provide any relief to households experiencing a loss in purchasing power and policymakers who will attempt to restore price stability without causing a recession," Brusuelas said.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read at Benzinga

Read the original article on Benzinga

'Inflation's Momentum Is Still Strong': Experts React To 8.3% CPI Inflation, Higher Than Expected
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email