Market Reports - US Inflation Watch May 2024
US Inflation Watch May 2024 - Highlights
March CPI confirmed strong Q1 inflation, delaying expectations for the Fed’s first rate cut. Transportation services and shelter inflation are key for future policy adjustments
Import prices rose more than expected in April. While Chinese import prices remain deflationary, the pace of decline has been slowing, posing slight upside risk to core goods inflation
Despite the strong Q1 inflation readings, cooling in the labour market, evidenced by declining job openings and a steady quits rate, suggests wage pressures may continue to ease
Commodity prices rose in March and April, with copper reaching a two-year high thanks to better manufacturing data from China and Europe. Gold prices continued higher
The Fed announced a slowdown in QT starting this month, and despite higher tax collections, Treasury issuance for Q2 was revised higher due to overestimated receipts
Entering 2024, the market expected over 160bps of rate cuts, driven by disinflationary momentum in Q4. With momentum stalling in Q1, only a single cut is now fully priced for 2024
US Inflation Watch presents 20 charts comprising 23 key inflation indicators grouped into five categories of economic data including consumer/producer price inflation, commodity prices, wage inflation, inflation expectations and broad monetary indicators. All data are sourced from official sources including the Bureau of Labor Statistics, the Federal Reserve, University of Michigan and Commodities Research Bureau. The objective of this report is to provide a comprehensive summary of inflation and future indicators of inflation according to the latest data out of the US.
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