Inflation Hits a 40 Year High!

 
 

Consumer inflation reached a 40-year high and Fed members made headlines in response. Jobless Claims continue to move in the right direction.

The Consumer Price Index showed consumer inflation rose by 0.6% in January while the year-over-year rose from 7% to 7.5% – the hottest level since 1982!

The National Federation of Independent Business released important data that speaks to how inflation is impacting small businesses. The Small Business Optimism Index fell to 97.1 in January, which is the weakest since February 2021. Within the report, plans for higher selling prices rose another 4 points to the highest level since 1974. Compensation costs rose another 2 points to 50, which is the highest since 1984 when the question was first asked. Both of these figures reflect the rise in inflation.

Fed members have also been sharing their opinions about how the Fed should address rising inflation, and their actions in the coming months will be critical to monitor because they will have a big impact on Mortgage Bonds and interest rates. Read more about this below.

After Omicron sparked a rise in unemployment claims in the early part of January, Initial Jobless Claims declined again in the latest week, as the number of first-time filers fell by 16,000 to 223,000. Continuing Claims, which measure people who continue to receive benefits after their initial claim is filed, were unchanged at 1.62 million. There are now 2.099 million people in total receiving benefits, which is a stark contrast to the 20 million people receiving benefits in the comparable week the previous year. Claims are at very strong pre-pandemic levels, showing that the labor market remains tight.

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