New data on inflation indicators increases anxiety in the markets

Tuesday, April 30, 2024 - 18:41
Point Trader Group

A package of important American economic data for the US Federal Reserve in determining the course of monetary policy revealed unsuspecting indicators about reducing inflation. As a result, Treasury bond yields jumped after the data.

Employee compensation costs jumped more than expected at the beginning of the year, representing another danger signal about persistent inflation. The Labor Cost Index, a measure of wages for civilian workers, jumped 1.2% in the March quarter, above the consensus estimate of 1% from economists surveyed by Dow Jones.

Strong demand and tight supply continue to push home prices higher, although mortgage interest rates are moving higher again.

Read also: The US Federal Reserve asks for more confidence that inflation is moving towards the 2% target

At the same time, consumer confidence data indicated that consumers' outlook towards economic conditions was negative and pessimistic compared to expectations, and also compared to the previous reading, which was revised downward.

Consumer confidence index data for April revealed a record of 97 points, compared to expectations of a record of 104 points, while the previous reading came at 104.7 points, but was revised downward to 103.1 points.

With this number, consumer confidence reached its lowest level since mid-2022 in March, with growing concerns about employment and inflation.

The Conference Board's main index came in at 97, below the downwardly revised level of 103.1 in March, and missing the Dow Jones estimate of 103.5. This was the lowest level for the index since July 2022, although board officials said their measure of current conditions remained at a fairly healthy level and the headline index had been in a “relatively narrow range” for more than two years.

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