Industry and Economy Perspective
Q3 2024 Market Update
SUMMARY: Inflation steadily retreating, not yet at Fed target; Food inflation varying in US vs. Canada
As of May 2024, the 12-month consumer price index (CPI) in the United States was 3.4%, excluding food and gas prices. This is a decrease from the 9.1% peak in 2022, but still higher than the 2% target set by the U.S. central bank. (Bureau of Labor Statistics)
The US Producer Price Index, measuring wholesale prices paid, declined 0.2% in May, and US consumer prices remained steady in May as cheaper gasoline offset higher costs for rental housing. However, inflation likely remains too high for the Federal Reserve to start cutting interest rates before September against the backdrop of a persistently strong labor market. The Fed’s Open Market Committee predicted on June 12 there would be just one rate cut in 2024. (Modern Distribution Management, Reuters) Food-at-home (grocery store or supermarket food purchases) CPI increased 0.1% from March 2024 to April 2024 and was 1.1% higher than April 2023. Food-away-from-home (restaurant purchases) CPI increased 0.3 percent in April 2024 and was 4.1 percent higher than April 2023. Food price inflation overall is expected to continue decelerating in 2024. (USDA) . Latest reported rate of inflation in Canada is for April, 2.7%, down from 2.9% the month prior and from 4.4% in April 2023. 2.7% is lower than the recent long- term average of 3.15% and is within the Bank of Canada’s target range of 1 to 3% for three consecutive months. Canada’s food inflation rate slowed in April as well, with grocery store costs dropping from 1.9% to 1.4% and restaurant prices falling from 5.1% to 4.3%. (The Globe and Mail, Statista, Trading Economics) Wholesale inventories rose 0.1% at the start of the second quarter, mirroring a similar rise in sales, according to US Commerce Department data. Current metrics suggest that inventory stocks are broadly keeping pace with demand, and the inventory-to- sales ratio sits at 1.35 months compared with 1.39 months a year ago. (Nasdaq RTT News)
Consumer Price Index Year-over-year percentage change
1M 3M 6M YTD 1Y 3Y 5Y 10Y MAX
US Inflation Track - YCharts
Canadian Inflation Track – Bank of Canada
JUL ’23
OCT ‘23
JAN ’24
APR ‘24
Target Range CPI Inflation
6
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