Economy, Small Business

Economic Data Roundup (06/12/2018)

6/12/18 12:00 PM

iStock-119520974.jpgThere were two important reports on the U.S. economy released this morning. First, inflation pressures in America continued to intensify in May, as the consumer price index (CPI) for all urban consumers rose by 0.2 percent. That was in line with forecasts and enough to lift the year-over-year pace of growth to a 6-year high of 2.8 percent (not seasonally adjusted). “Core” CPI, which excludes the volatile food and energy components, increased by 0.2 percent in May and 2.2 percent over the past twelve months. For now these figures will help officials at the Federal Reserve justify additional interest rate hikes, such as the 25 basis point increase expected to be announced tomorrow afternoon. However, some economists are already worried about rising inflation’s potential impact on consumer spending, especially since today’s CPI data implies that average hourly earnings for Americans have not grown at all over the past year after being adjusted price changes.

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Elsewhere, small business owner confidence firmed last month, according to a report from the National Federation of Independent Business (NFIB). Specifically, the headline optimism index jumped to 107.8 in May, significantly better than expected and the 2nd-highest headline reading in the 45-year history of this survey. Under the hood, eight of the ten main components that make up the sentiment gauge strengthened last month, including large improvements in owners’ outlooks for sales growth, business expansion, and the overall economy. The only major component that declined in May was current job openings, not surprising with a record 35 percent of survey respondents reporting that they increased labor compensation in an attempt to better attract and retain talent. Moreover, 48 percent of owners complained about there being “few or no” qualified applicants for the positions they are trying to fill, and quality of labor was once again the top-cited problem facing small businesses in America. The report’s authors added that “Hiring is proceeding as fast as labor supply issues allow. … Accounting for about half of the economy, Main Street is definitely driving economic growth and employment to higher levels.”

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Sources: Econoday, U.S. DoL, NFIB, Bloomberg, FRBSL

Post author: Charles Couch