...is at 6.8%! That is very hot and is a result of the Producer Price Index (PPI)coming in at 0.8% for April. This high number was a much higher than anticipated number of 0.5%! When you strip out food and energy costs, Core PPI is now at 0.3% for the month, which now makes the year over year Core PPI Rate at 2.1% It is my belief that Producer or Wholesale inflation does not always get passed on to the consumer. At some point one of two things are bound to happen - either the company, which is now stuck with increased costs, must pass the increase to the consumer by raising prices, thus boosting consumer inflation, or the second option is for the company to eat those higher costs, whih will hurt earnings, crippling the ability to expand and/or create jobs, which then causes futher slowing of economic growth. It is a vicious cycle which must be broken and government needs to get out of the way and allow companies to do what they do best, and that is produce, make profits, and employ people.
The Initial Jobless Claims were 434,000, above expectations of 423,000, and way above the 400K mark, providing evidence that the struggles in the labor market are not "transitory".
Rates have remained below the magical 5% range for a couple weeks now. What a great time to buy a home, if you have a good, solid job and good credit!
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