Economic Round-Up: Inflation’s Impact

Inflation continues to make headlines. Here’s a summary of developments reported by Chad Moutray, chief economist of the National Association of Manufacturers:

• Last month, the U.S. consumer price index rose 5% compared to a year ago — the largest jump since 2008.
• Over the past 12 months, producer prices for final-demand goods and services have jumped by 6.5%, the largest increase on record.
• Core producer prices have expanded by a record 5.3% since May 2020, with a gain of 4.3% since February 2020.

The Federal Reserve announced this week it will keep interest rates at zero to 25 basis points, adding that rising inflation is likely to be temporary. Moutray said “if cost pressures do not abate, the Federal Reserve and its stance of keeping rates near zero will be under pressure” and “the shift toward normalization could be sooner than now believed.” 6/16/2021