Week In Review 6.17.2019

Inflation—The Consumer Price Index (CPI) rose 0.1% at both the headline and core levels in May. Falling gasoline prices suppressed the headline measure, while another decline in used car prices and moderating residential rents contained core prices. Y/Y, CPI has softened to a 1.8% annualized rate, down from 2.0% last month. Also, core CPI slipped to 2.0% annualized, the least since February 2018. Similarly, The Producer Price Index (PPI) firmed in May, but only slightly, up just 0.1% and 0.2%, respectively, at the headline and core levels. Y/Y, PPI figures continue to trend at a stable 2.0% – 2.5%.

Retail Sales bounced back in May with both the headline index and core control group categories rising 0.5%. Y/Y, retail sales have advanced 3.6%, which represents a modest acceleration over the past few months.

Industrial Production rebounded 0.4% in May, the most in six months, and above the consensus of 0.1%. Y/Y, headline industrial production rose 2.0%, an improvement over the previous month, but less than half the pace from last fall.

Small Business Optimism showed no deterioration despite a month of trade tensions. In fact, sentiment strengthened for a second straight month.

Consumer Sentiment softened in June due primarily to a sharp fall in long-term inflation expectations. While reported underlying economic data may be mixed year-to-date, overall confidence remains stable to improving.

Gold prices peaked at $1,362 an ounce on Friday, before settling at $1,340, the highest level in 14 months. Gold has climbed in June amid concerns that slowing economic growth could trigger an interest rate cut by the Federal Reserve, potentially raising inflation risks that can often lead investors to bid up prices for gold.