Inflation Keeps Surging in the US, Leaving No Place for the FED to Hide - Forex News by FX Leaders
Inflation is surging as well in the US now

Inflation Keeps Surging in the US, Leaving No Place for the FED to Hide

Posted Thursday, June 10, 2021 by
Skerdian Meta • 2 min read

The US economy has been surging for some time, leading the global economy in this post-pandemic world. All sectors have been expanding fast, but the FED has played it down as transitional until the situation stabilizes.

They have been pointing at inflation, but inflation is also surging now, with the CPI (consumer price index) increasing by 5% last month on an annualized basis. So, the FED has nothing to hide behind now, and they should start thinking about tightening the policy, which will turn the USD bullish.

Highlights of the June 2021 US CPI report

  • May CPI +5.0% y/y vs +4.7% expected
  • Prior was +4.2% y/y
  • Core CPI ex food and energy +3.8% y/y vs +3.5% expected
  • Prior ex food and energy +3.0%
  • CPI +0.6% m/m vs +0.5% expected
  • Prior m/m reading was +0.8%
  • CPI ex-food and energy +0.7% m/m vs +0.5% expected
This is a big upside surprise for the second month in a row. Just one of the economists in the BBG survey had inflation at 5.0% or higher.

Wages data:

  • Real avg hourly earnings -2.8% vs -3.7% y/y prior
  • Real avg weekly earnings -2.2% vs -1.7% y/y prior

 

Weekly US initial jobless claims in continuing claims.

Initial Joe's claims
  • Initial jobless claims 376K versus 370K estimate
  • Prior report 385K unrevised from last week
  • Initial jobless claims 376K versus 370K estimate.  This is the lowest level since March 14, 2020 when the claims came in at 256K
  • 4-week moving average initial jobless claims 402.5 K versus 428K last week. This was the lowest level since March 14, 2021 the four-week average was at 225.5 K.
  • Continuing claims 3,499K versus 3,650K estimate
  • 4-week moving average continuing claims 3,651.2 5K versus revised 3,686.5 K (was 3,687.75K).
  • The largest increases in initial claims for the week ending May 29 were in Pennsylvania (+7,064), Illinois (+4,298), Kentucky (+3,454), Missouri (+2,744) and Michigan (+1,664),
  • The largest decreases were in Texas (-3,114), Oregon (-1,822), Virginia (-1,753), Florida (-1,625) and Washington (-1,577).
  • During the week ending May 22, 51 states reported 6,347,472 continued weekly claims for Pandemic Unemployment Assistance benefits and 51 states reported 5,231,952 continued claims for Pandemic Emergency Unemployment Compensation benefits
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