Inflation eases a bit as Fed officials prepare for monetary policy meeting
Good day. Overall, consumer prices in the United States rose 5.3% in August from a year earlier, a slightly slower pace than in June and July but still close to a high for 13 years, while for the lowest-paid Americans, real wages – adjusted for rising prices – fell 0.5% in August from a year earlier. It is a situation that leaves some Americans on the sidelines. Meanwhile, this 5.3% increase could be good news for the Federal Reserve, as it means that the recent spike in inflation, which has put pressure on prices far above the inflation target. of 2% from the central bank, could subside, even as policymakers prepare for their monetary policy. political meeting next week.
Now on to today’s news and analysis.
Inflation eased in August, although still high
The Labor Department said the seasonally adjusted consumer price index rose 0.3% seasonally in August from July, slower than the 0.5% month-on-month increase in July, and sharply down from the 0.9% pace in June. Auto prices eased, as used vehicle prices fell sharply and hotel and air fares declined. On an annual basis, the Consumer Price Index rose 5.3% in August from the previous year, down from the 5.4% pace recorded in June and July, on a not seasonally adjusted.
Labor shortages give low-paid workers a boost. Inflation is gnawing at him.
This should be the best time for low-wage workers, as pandemic-induced labor shortages are forcing employers to dramatically increase wages. Yet for many this is not the case, as those same disruptions have pushed inflation near its highest rate in more than a decade.
Derby’s point of view: Fed faces cross currents of inflation ahead of FOMC meeting
By Michael S. Derby
As the Federal Reserve prepares for its monetary policy meeting next week, it faces difficult cross currents on the inflation front.
The Fed has been facing an unexpected surge in price pressures for some time, testing its willingness to maintain monetary policy on an aggressive basis of support to help the US economy recover from the hard blow of the coronavirus pandemic. Read more.
Key developments around the world
Census figures show Americans’ incomes plummeted in 2020
Median household income in the United States was $ 67,500 in 2020, down 2.9% from the previous year, when the country’s median household income set what was then an inflation-adjusted record. dating back to 1967.
Global oil supply under pressure from Hurricane Ida and other blackouts
The impact of Hurricane Ida and other oil supply blackouts will weigh on global oil production this year, according to the International Energy Agency, which has reduced its forecast of a supply rebound for 2021 of 150,000 barrels per day.
US, Europe seek to end funding for coal exports
Overview of financial regulation
Gary Gensler Focuses On Crypto Trading Platforms At Senate Hearing
Securities and Exchange Commission Chairman Gary Gensler told lawmakers he was taking a close look at cryptocurrency trading platforms and companies that pay to execute individual investor trades while calling for more funding for the regulatory agency.
Democratic tax plan would hit million dollar households the hardest
Households earning at least $ 1 million in income would face a 10.6% tax hike in 2023 as part of the House Democrats’ plan, raising their average federal tax rate to 37.3% against 30.2%, according to the non-partisan Joint Committee on Taxation.
Property taxes are easy to avoid. House Democrats want that to change.
Two decades of tax law changes have made it easier for wealthy families to avoid inheritance tax when passing their wealth from one generation to the next. About 1,900 tax filers paid the tax in 2020, up from more than 50,000 in 2001, according to estimates from the Tax Policy Center.
Wednesday (every hour ET)
8:30 a.m .: European Central Bank Schnabel delivers welcoming remarks at the ECB Bond Market Contact Group online conference
9:15 am: Federal Reserve releases August US industrial production
11 a.m .: Lane from the European Central Bank speaks during the Institute for Monetary and Financial Stability webinar on the ECB’s monetary policy strategy
Time N / A: Central Bank of Egypt issues policy statement
8:00 a.m .: Lagarde from the European Central Bank on the euro and the European economy in a live forum
8:30 a.m .: US Department of Commerce releases August retail sales
Big risks for the United States because of the Brinkmanship debt limit
The battle to raise the US government’s debt limit comes with big risks, Goldman Sachs economists wrote in a note to clients on Monday. “While it seems likely that the Treasury will continue to repurchase maturing Treasury securities and make coupon payments, if Congress does not increase the debt limit by the deadline, the Treasury should suspend more. 40% of expected payments, including some payments to households. They wrote. They added that a failure to raise the limit could further hamper Democratic attempts to implement fiscal policy and reduce the amount of money the United States can borrow. There is not necessarily a direct link between the debt ceiling and the tax package, the more these issues become entangled, the more the centrist Democrats can exert pressure to reduce the size of the tax package, “the economists wrote.
– Michael S. Derby
For the Fed, inflation doesn’t matter … for now
Inflation metrics are unlikely to show a massive cooling or massive acceleration by November, so the only thing that might delay the Fed from starting to cut its bond purchases is a really lousy jobs report. , writes Justin Lahart.
Supply chain disruptions are said to have affected around half of the companies polled for a September snapshot of risk perceptions by Oxford Economics, with one in eight respondents severely affected. Half of those affected expect supply chain problems to persist beyond the first half of 2022 (Dow Jones Newswires)
Investor expectations for the continued expansion of the global economy in the coming months have cooled significantly, according to a monthly Bank of America survey. The share of respondents expecting global economic growth in the next few months fell to 13% in August, the lowest level since the pandemic took hold in March of last year, from 75% two months ago. (DJN)
Eurozone investors have bought a record amount of over â¬ 500 billion of foreign stocks in the past 12 months, a sum of around $ 591 million, said Marchel Alexandrovich, senior European economist at Jefferies . (DJN)
Small business owners in the United States were slightly more optimistic in August, according to the National Federation of Independent Businesses, whose NFIB Small Business Optimism Index fell from 99.7 in July to 100.1 last month . (DJN)
Canadian mill sales fell 1.5% in July from June to seasonally adjusted C $ 59.55 billion, the equivalent of $ 47.08 billion, as shipments of wood products and Aerospace products and parts fell sharply, Statistics Canada said Tuesday. (DJN)
Brazil’s service sector grew 1.1 percent in July from June and 17.8 percent from the previous year, the country’s statistics agency said. (DJN)
India’s trade deficit widened in August to $ 13.81 billion from $ 8.2 billion a year earlier, according to government data. Exports increased 45.76% over the previous year, while imports increased 51.72%. (DJN)
Tanzania’s economy grew 4.9% in the 12 months to July 31, boosted by construction, transportation, agriculture, manufacturing, and mining and quarrying, the country’s central bank said. . (DJN)
(END) Dow Jones Newswires
September 15, 2021 09:06 ET (13:06 GMT)
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