May CPI Seen Rising 0.5%, Cutting Real Wages 0.8% as Inflation Nears 4.5%
Updated
Updated · Real Economy Blog · Jun 9
May CPI Seen Rising 0.5%, Cutting Real Wages 0.8% as Inflation Nears 4.5%
2 articles · Updated · Real Economy Blog · Jun 9
Summary
A May CPI increase of 0.5% would lift annual inflation to 4.2% when U.S. data are released Wednesday, according to Joe Brusuelas.
That forecast implies real wages fell 0.8% over the past 12 months, with elevated energy, transportation, food and fertilizer costs still feeding through the economy.
Brusuelas said May may mark a near-term inflation top, but he still expects inflation to edge up toward 4.5% rather than retreat quickly.
September or early October could bring a second wave of price increases in food, apparel and especially services if supply-chain operational stress worsens.
Oil and refined-product drawdowns are adding to that stress, and Brusuelas said a realistic roadmap to reopening the Strait of Hormuz is needed to ease it.