The consumer price index remained unchanged for the month of July as the energy index fell 4.6%, setting the consumer price index at 8.5% over the past 12 months. The food index rose 1.1% while the food at home index rose 1.3%, causing average Americans to be more cost-conscious when it comes to feeding their families.
The SPDR S&P 500 ETF Trust SPY traded higher by 1% on Wednesday morning after the Labor Department reported an 8.5% year-over-year increase in the consumer price index in the month of July, a potential sign that inflation may finally have peaked. What Happened: The headline CPI rose 8.5% in July, down from 9.1% in June.
Fears of a recession have reportedly led fund managers to wager the most bearish bets on the Australian dollar since March. Price Movement: The Australian dollar has fallen over 4.5% since the beginning of the year against the U.S. dollar.
According to a new poll conducted by ABC News and Ipsos, almost 70% of Americans said that they believe the U.S. economy is worsening. Meanwhile, only 12 percent of Americans said the economy is improving, and 18% believe that the economy has remained the same. About 34% said they approve of President Joe Biden's handling of gasoline price, which is up by 7% since June.
Tesla Inc CEO Elon Musk has said that the U.S. recession is inevitable and will last for the next year and a half. Speaking at the electric-vehicle maker's annual shareholder meeting last week, Musk said that inflation would "drop rapidly" soon and the U.S. is past peak inflation. "We will have a recession; I think it will be a relatively mild recession.
The U.S. Treasury Yield Curve remained inverted as the employment situation report for July was reported, announcing 528,000 jobs added to the economy. Although unemployment is back to pre-pandemic lows of 3.5%, an inverted yield curve is a leading indicator that the economy is heading for a recession.
For the first time since April, purchase mortgage rates dropped below the 5% level, reflecting the Federal Reserve's monetary policy that has led the U.S economy to a "technical recession." Bond yields increase and prices decline when demand declines.
The Indian rupee fell below the 79.5 mark against the dollar on Thursday morning Asia session as the country's trade deficit widened to a record $31 billion. What Happened: Government intervention in exporting petroleum products and other commodities in the wake of higher inflation and local demand is understood to have contributed to the widening of the trade deficit.
On Friday, August 5th, at 8:30 a.m. EDT, the July nonfarm payroll data will be released by the Bureau of Labor Statistics. The BLS announced a measure of 372,000 for June, which beat analysts estimates of 268,000 but was a decrease from May's reporting of 390,000. For July, the consensus analyst estimate is that the reporting will show a positive change of 250,000 new jobs.
The SPDR S&P 500 ETF Trust has rallied 3.2% in the past five days as investors seem to be taking an increasingly bullish tone toward the health of the U.S. economy, particularly on the inflation front. The Federal Reserve raised its target fed funds rate by 0.75% last week to a new range of between 2.25% and 2.5%, its second 0.75% rate hike in two months.
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