Consumer Inflation Shows Small Signs of Life

Just out from the Bureau of Labor Statistics, the Consumer Price Index rose by 0.6% in June and that was slightly higher than the 0.5% bump that was expected. That measure fell by 0.1% in May. The year-over-year headline rate came in at 0.6% as analysts estimated. May’s year-over-year rate was 0.1%. At the core level without food and energy, June’s rise of 0.2% beat the anticipated increase of just 0.1%. June’s year-over-year core rate remained unchanged at 1.2% against an estimated dip to 1.1%.

Also in this morning’s report was the impact that inflation has on hourly workers purchasing power. In June, Real Average Hourly Earnings rose by 4.3% after May’s jump of 6.4%. On a weekly basis, Real Average Earnings rose by 4.6% on the heels of May’s jump of 7.3%. These earnings reports are still somewhat skewed by unemployment-related transfer payments within the convoluted composition of the work force as businesses haltingly make progress on reopening.

Earlier this morning, the National Federation of Independent Businesses reported that it’s Small Business Optimism Index improved much more than expected to 100.6 from May’s 94.4 and against an expected rise to just 97.8. The less good news is that the survey period preceded the latest setbacks and pauses to nationwide reopening efforts.

Markets seem nonplussed by this morning’s data and the Ten-Year is languishing at a yield of 62 basis points as equity markets look to open slightly in the green. Crude oil (WTI) has slipped below $40 while gold is hanging in there at about $1,803.