Day: 13 August 2024

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U.S. wholesale inflation rose 0.1% in July 2024 by less than expected

U.S. economic inflation PPI data

In July 2024, a principal indicator of U.S. wholesale inflation climbed less than anticipated, potentially paving the way for the Federal Reserve to begin reducing interest rates.

The Producer Price Index (PPI), which is a gauge of wholesale inflation, saw a modest increase of 0.1% for the month of July, falling short of the 0.2% prediction. Excluding food and energy, the PPI remained unchanged.

Year-on-year, the headline U.S. PPI ascended by 2.2%, marking a significant decline from June’s 2.7% figure.

Should the Federal Reserve not proceed now with a rate cut VERY soon, it is probable that a ‘frenzy’ of ‘catch-up’ rate cuts will ensue to counteract a struggling economy.

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UK unemployment falls slightly and pay growth slows

UK employment data

Official figures indicate a slight decrease in the UK’s unemployment rate, which was 4.2% in the three months to the end of June 2024, a drop from the previous quarter’s 4.4%.

In contrast, UK wage growth has decelerated, with an annual increase of 5.4%, marking the lowest rate in approximately two years.

Not all positive

The Office for National Statistics (ONS) has acknowledged some positive developments, yet it also noted indications of a ‘cooling’ job market, evidenced by an increase in job vacancies, a rise in redundancies, and a persistently high number of individuals not actively seeking employment.

This trend emerges as businesses are grappling with escalating operational costs and potentially reducing their recruitment efforts.