6/16/2023 – MetroIntelligence Economic Update by P. DUFFY

MetroIntelligence Economic Update by P. DUFFY

 

CPI falls to 0.1 percent in May and 4.0 percent year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) rose just 0.1 percent in May on a seasonally adjusted basis, and was up 4.0 percent year-on-year, the smallest increase since March 2021. The index for all items less food and energy (the ‘core’ index) rose 0.4 percent in May, and was up 5.3 percent year-on-year, the smallest increase since November 2021.

https://www.bls.gov/news.release/cpi.nr0.htm

 

Producer Price Index falls 0.3 percent in May, up 1.1 percent year-on-year

The Producer Price Index for seasonally adjusted final demand declined 0.3 percent and was up 1.1 percent for the 12 months ended in May, the lowest annual increase since December 2020. Prices for final demand less foods, energy, and trade services were unchanged in May and rose 2.8 percent year-on-year, the lowest annual increase since February 2021.

https://www.bls.gov/news.release/ppi.nr0.htm

 

Federal Reserve pauses rate increases, revises economic projections

As expected, although the Federal Reserve did opt to keep interest rates higher for now, its revised economic projections also show more stubborn core inflation, prompting higher Federal Funds rates through 2025 than forecast in March. The new projections show Federal Funds rate for 2023 rising from 5.1% to 5.6% (signaling further hikes ahead this year), falling to 4.6% in 2024 (up from 4.3% in March) and 3.4% in 2025 (up from 3.1% in March).

https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230614.pdf