A worrisome bout of inflation struck the economy in April, with U.S. consumer prices for goods and services surging 0.8%, the largest monthly jump in more than a decade, and the year-over-year increase reaching its fastest rate since 2008.
The acceleration in prices, which has been building for months, has unsettled financial markets and raised concerns that it could weaken the economic recovery from the pandemic recession.
Wednesday's report from the Labor Department showed sharply higher prices for everything from food and clothes to housing. A 10% surge in the prices of used cars and trucks — a record jump — accounted for roughly one-third of last month's increases. Prices for vehicles, both used and new, have been soaring as a result of a computer chip shortage that has slowed auto production and reduced dealer supplies.
Over the past 12 months, consumer prices have jumped 4.2% — the fastest rise since a 4.9% gain in the 12 months that ended in September 2008. Excluding volatile food and energy, core inflation rose 0.9% in April and 3% over the past 12 months.
After years of dormant inflation, with the Federal Reserve struggling to increase it, worries about rising prices have shot to the top of economic concerns. Shortages of goods and parts related to disrupted supply chains have been a key factor.
The Fed, led by Chair Jerome Powell, has repeatedly expressed its belief that inflation will prove temporary as supply bottlenecks are unclogged and parts and goods flow normally again. But some economists have expressed concern that as the economic recovery accelerates, fueled by rising demand from consumers spending freely again, so will inflation.
“It looks like inflation pressures are not only building but are likely to be here at least through the rest of the year,” said Joel Naroff, chief economist at Naroff Economic Advisors. “With growth robust, firms have a measure of pricing power tat they haven't had in decades, and they appear to be using it.”
Investors, too, have grown increasingly jittery. On Tuesday, the Dow Jones Industrial Average sank more than 470 points — 1.4% — its worst day since Feb. 26.
Wednesday's inflation report showed that food prices rose 0.4%, the biggest such increase since a 0.5% rise last June. Energy costs, though, edged down 0.1%, with gasoline pump prices falling 1.4%, the biggest drop since May 2020.
Last month, Powell suggested at a news conference that Fed officials expect inflation to move above its 2% annual target over the next few months. The Fed has said it will allow prices to rise slightly above 2% for a period of time to make up for the past decade's shortfalls in inflation.
Powell has said that as long as the increase in inflation doesn't appear to be hurting consumer and business expectations about price increases, the central bank would be willing to let prices rise without acting to raise interest rates. That view has been supported by comments from other Fed officials including Lael Brainard, a board member who warned Tuesday against a premature Fed tightening that could harm the economy.
Danvas is a new company that aims to bring NFTs and digital artwork into the real world through an interactive, museum-quality display. The company says its product is the first premium, luxury digital art canvas, which it hopes will accelerate the world's appreciation of digital artists and their work, and empower collectors to acquire more NFT art. Danvas also just announced its launch this week, with a $7 million seed round from some big-name backers. Danvas co-founder and CEO Jeanne Anderson joins Cheddar News' Closing Bell to discuss.
The California-based tech company specializing in enterprise cloud-based data analysis of connected internet of things (IoT) has gone public on the NYSE, and Samsara's CFO Dominic Phillips told Cheddar's Kristen Scholer that the timing was right for the public offering for the firm's next phase of growth. "We're going to continue to add to our go-to-market motion, we'll continue to build out our international presence, we'll continue to add more selling capacity specifically as we look to penetrate larger enterprise customers, and we'll look to continue to deploy money in R&D," he said.
Mark Sebastian, CIO of Karman Line Capital, breaks down the Gamestops profitability hurdles and provides an outlook on the company's turnaround strategy.
Actor, pastor, and now author Kel Mitchell joined Cheddar's 'Between Bells' to talk about his new book 'Blessed Mode: 90 Days to Level Up Your Faith' and what inspired him to write it. Mitchell said the book aims to help people boost their physical, mental, and spiritual wellbeing. Ordained as a pastor in 2019, he talked about his service in the church. He also talked about what it was like working with former castmates on Nickelodeon's 'All That' reboot.
Cheddar is looking back at the 12 biggest buzzwords of the year leading up to Christmas. The sixth term in the countdown is SPAC. Definition: (noun) abbreviation for Special Purpose Acquisition Companies. Describes companies formed to raise money through initial public offerings (IPO), to acquire or merge with an existing company.
Jeff Thomas, Senior Vice President & Head of West Coast Listing for the NASDAQ, talks about the year in IPOs and the industries seeing the most activity within the tech sector.
VR/AR collaboration platform Spatial is diving head first into the Metaverse. The company is switching up its image--now branding itself as 'the metaverse for cultural events,' aiming to become the new virtual hub for NFT galleries, brand experiences, and large-scale conferences. Jacob Loewenstein, Head of Business, Spatial, joined Cheddar's Opening Bell to discuss the company's pivot.
With the rise of meme stocks, investing platforms like Public.com saw a surge in usership as retail investors flocked to the stock market. Ahead of the new year, Public.com is pushing beyond the memes, to better understand the motivations and behaviors of the retail trader.
Its recent 'The Outsiders' report takes a deeper look at who these retail investors are, what drives their trades, and what their portfolio says about them. Stephen Sikes, COO, Public.com joined Cheddar News to discuss.
Jason Moser, Senior Analyst & Lead Advisor at The Motley Fool, discusses how the meme saga has impacted the stock market and what the future holds for companies embracing retail investors.
