Three signs of US inflation
There are clear signs that inflation is back and has already become entrenched in markets, with cost inflation pulling down profits in the US, according to Lonsec Research.
One of these signs was the fact that the biggest firms began to report higher input costs and the largest consumer manufacturers were faced with either lower revenue or higher cost of sales, which put some additional pressure on margins.
Lonsec also said that manufacturers were forced to pay more for raw materials, with the prices paid growing at the fastest rate since 2011.
Following this, input prices were rising along with commodity prices, including oil and metals, while US importers expected to feel the impacts of Trump’s escalating tariff war.
On top of that, core inflation measures were at or near the Federal Reserve’s target. That meant while the Fed kept rates on hold in May, both headline and core measures of inflation started to grow.
Lonsec stressed that, in particular, the CORE PCE Index, which was the Fed’s preferred inflation measure, was set to rise above two per cent, giving the Fed further impetus to hike rates through 2018.
AUTHOR
Oksana Patron
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
