The year-on-year growth rate of the United States in May PPI slowed down slightly, but it still hovered near historical highs. The ring accelerated compared with last month, highlighting the continued inflationary pressure of the overall economy, which may prompt the Federal Reserve to actively raise interest rates.
On Tuesday, June 14, data released by the U.S. Department of Labor showed that the U.S. PPI (Producer Price Index) in May increased by 10.8% year-on-year, slightly lower than expected and the 10.9% increase after last month's correction; it rose by 0.8% month-on-month, the same as expected, but higher than the 0.4% increase last month. is also the 23rd consecutive month-on-month increase.
Excluding food and energy with high fluctuations, the US core PPI rose 8.3% year-on-year in May, lower than the expected 8.6% and the previous value of 8.8%, but the core PPI rose 0.5% month-on-month, higher than the 0.2% increase last month.
gasoline and truck freight prices rose the fastest
5 PPI growth in May was due to the rise in commodity prices, especially the rise in energy prices.
The growth of commodity prices, 40% can be attributed to the rise in gasoline prices; the prices of aviation fuel, residential natural gas , steel mill products, and diesel also rose; affected by the decline in beef and pork prices, the final food price index was the same as last month.
service industry prices rose 0.4% in May after falling in April. Nearly 30% of this increase can be attributed to the rise in truck freight prices; prices in sub-items such as securities brokerage trading services (parts), machinery and equipment wholesale, chemical and related products wholesale, automobile and parts retail, passenger transportation (parts), etc. have also risen. In contrast, profits in fuel and lubricant retail fell by 21.7%. Portfolio management and room rental indexes also declined.
Although the prices of some commodities have fallen from their April highs, , the broader inflation pressure does not seem to be eased soon, and the prices of intermediate demand products are still significantly higher than the overall level .
The Russian-Ukrainian conflict continues to disrupt global food and energy supply, and factors such as the epidemic and labor shortage may continue to disrupt the supply chain.
In addition, as the gap between CPI-PPI is still significantly lower than expected, corporate profit margins are still under pressure.
The Federal Reserve considers a bigger rate hike
Data released last week showed that the United States unexpectedly accelerated to its highest level in 40 years in May, and this rise shattered hope that inflation began to slow down. At the same time, consumer long-term inflation expectations at the University of Michigan in the United States also rose unexpectedly.
plus the latest PPI data remain high, suggesting that U.S. inflation will last longer than most economists (and the Fed) had expected earlier, which could lead the Fed to consider a bigger rate hike.
JP Morgan and Wells Fargo and other investment banks expect the Fed to raise interest rates by 75 basis points this week, which will be the largest rate hike since 1994.
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