Prices Continue to Advance

Wells Fargo Research Team Wells Fargo

U.S. Review

Prices Continue to Advance

Consumer prices increased 0.2 percent in July, advancing to 2.9 percent on a year-to-year basis, the strongest pace in six years. The core CPI index also rose a strong 0.2 percent, bringing the year-to-year rate to 2.4 percent.
The Producer Price Index showed no change in July. However, underlying details showed prices trending higher. Excluding food, energy and trade services, prices rose 0.3 percent.
JOLTS data for June indicated that the number of open job positions remained near record highs at 6.7 million. The quits rate also remained elevated at 2.3 percent.

Global Review

Lackluster Growth in Some Foreign Economies in Q2

Real GDP in Japan grew at an annualized rate of 1.9 percent in Q2, reversing the modest contraction that occurred in Q1. But inflation remains very low in Japan.
The British economy has expanded only 1.3 percent over the past four quarters. Uncertainty related to the Brexit negotiations remains high, which will keep the Bank of England cautious as it slowly hikes rates.
In contrast, the Canadian economy appears to have turned in a solid quarter in Q2. The unemployment rate is back to its cycle low, which should lead to another rate hike by the end of the year.

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Wells Fargo Research Team

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