But Fed chair Janet Yellen told Congress this week that the central bank is likely to lift short-term interest rates later this year.
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“The barriers to a Fed hike are starting to crumble”.
However, Commonwealth Bank of Australia economist Michael Blythe says the low Australian dollar, which on Monday morning was fetching US73.68¢, may force the RBA to revise up its inflation forecast. Last month’s increase pushed the year-on-year CPI rate into positive territory for the first time since December last year. “The energy index rose for the second straight month as the indexes for gasoline, electricity and natural gas all increased”.
Economists are forecasting a bounce back in June housing starts to an annualized pace of 1.12 million, after May’s 11% dip to 1.04 million, according to data from Choice Investment Management.
Economists anticipate that the housing market will mitigate the drag on the economy from a struggling manufacturing sector.
Inflation refers to the increasing price of goods and services that ultimately decreases a nation’s purchasing power. Stocks on Wall Street were trading mostly lower, though strong quarterly results from Google boosted technology shares. “The small loss in early July reflected a slight rise in concerns about global developments, which was partially offset by continued news of job gains”.
The University of Michigan’s preliminary consumer sentiment index for July dropped to 93.3 from 96.1 in June.
Overall consumer costs had tumbled in late 2014 and early 2015 because of plunging gasoline prices.
Over the last 12 months, though, the broad measure of consumer prices decline 0.7 percent for Midwest consumers, the bureau reported Friday.
Core inflation, which is the weighted median, is seen unchanged from last quarter at 0.6 per cent, and 2.3 per cent year-on-year, down from 2.4 per cent.
Inflation is running below the Fed’s 2 percent target.
The 3.4% increase, year-over-year, in the cost of food was led by a 6.6% jump in the cost of meat.
Food prices were a major factor in June’s increase, rising 0.3 percent in large part because of sharply higher egg prices.
The Bank of Canada’s core index was up 2.3 per cent from a year ago. “The savings from this and other low cost debt that should be used for development of infrastructure such as power, roads, bridges etc”.
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The increase in core prices reflected higher prices for shelter, recreation, airline fares, personal care, tobacco, and new vehicles.
