From our colleagues at our sister company, Argent Trust:
Announced this morning, the Consumer Price Index increased 1.0% in May and 8.6% on an annual basis, more than expected. Monthly prices for Fuel Oil, up 16.9%, Utility Gas Service (natural gas), up 8.0%, and Gasoline, up 4.1%, were all strong. Prices for Used Cars and Trucks also increased, up 1.8% in the month after falling -0.4% in April. The core rate, which excludes prices for food and energy, increased 0.6% in May and 6.0% on an annual basis, only slightly more than expected.
Overall, inflationary measures remain stubbornly elevated, as the headline number on an annual basis tenaciously moves three tenths higher than the previous month while most were expecting a slight decline. Increases exist across the spectrum of the report categories, with energy prices as a strong contributor. While the headline number ticked higher than the previous month (8.6% versus 8.3% previously) the core rate was slightly less (6.0% versus 6.2% previously). As spending continues to shift from goods to services, the health of consumer balance sheets remains a key point in determining whether spending can continue as the Federal Reserve moves through their policy tightening in the coming months.
In all, the 10-year US treasury yield ticks slightly higher following the report and equity futures are lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
