The Road Ahead for Consumer Prices

Consumer prices accelerated 8.3% y/y in April. Slightly more than the street was looking for and near the highest level in more than 40 years. The core CPI was also higher than expected. Our Chief Equity Strategist and Economist, John Blank, is here now to help us make sense of this economy.

1. Month-over-month gains were also higher than expected. Was there any good news in this data?

2. Over the past year real earnings have dropped but average hourly earnings have risen and April retails sales were up. So some mixed news there. But as inflation continues to rise, how long do you think it might take for consumers to cut back spending?

3. As we hear now about the possibility of gas rationing, rising housing costs and the jobs-workers gap, a key question and one that a lot of people are asking is “Can the Federal Reserve slow the U.S. economy enough to bring down inflation without causing a recession?” What do you think?

4. Has the world economy seen peak consumer price inflation yet?

5. With disappointing results from bellwether retailers having been reported, is there a wall of worry going on in that group?

6. What do retail earnings say about the consumer? Is that base weakening?

7. Should U.S. consumption turn down, in the face of high final, point-of-sale prices seen at major retailers, will that signal that the Fed won’t be able to tame inflation?

8. What will the 10 year U.S.Treasury rate tell us about this economy?

9. If you’re looking for stocks to consider now, you may want to look at Analog Devices ADI, Nutrien NTR, and Nucor NUE

Our Chief Equity Strategist & Economist, John Blank, on the economy, both domestic and global. With John, I’m Terry Ruffolo.

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