Wholesale prices, inflation data show improvement

ABC News business reporter Alexis Christoforous breaks down the latest inflation reports, which show wholesale prices dropped 0.5% and 262,000 people filed for unemployment claims.
4:24 | 08/11/22

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Transcript for Wholesale prices, inflation data show improvement
SUBPOENA THAT BROUGHT HIM TO THE TABLE YESTERDAY NEEDED TO BE HONORED. >> AARON KATERSKY, ALWAYS GREAT TO HAVE YOU. THANK, YOU ERIN. >> THANKS, DIANE. >> THERE IS MORE PROOF TODAY THAT INFLATION IS STARTING TO COOL. WHOLESALE PRICES ROSE 9.8% IN JULY COMPARED TO A YEAR AGO. 262,000 PEOPLE FILED UNEMPLOYMENT CLAIMS, UP 14,000 FROM THE PAST WEEK. WHAT'S THE BIG PICTURE HERE? ABC NEWS BUSINESS REPORTER, ALEXIS CHRISTOFOROUS, BREAKS DOWN FOR US. ALEXIS, WHAT ARE YOUR BIG TAKEAWAYS FROM TODAY'S INFLATION REPORT? LET'S START THERE. >> ALL RIGHT, LET'S START THERE, IT'S MORE ENCOURAGING NEWS ON INFLATION, WE ALL CAN USE A LITTLE BIT OF THAT DIANE. WE ARE SEEING HERE THAT PRICES AT THE WHOLESALE LEVEL, THESE ARE PRICES THAT BUSINESSES PAY FOR THEIR GOODS, THEY ROSE LAST MONTH, BUT NOT AS MUCH AS EXPECTED. WE'RE STARTING TO SEE THOSE PRICE INCREASES COOL DOWN A LITTLE BIT. IT TELLS US THAT PRICES ARE STILL ELEVATED, BUT THAT WE'RE STARTING TO SEE SOME PRICING PRESSURES EASED. DEFINITELY TWO STEPS HERE IN THE RIGHT DIRECTION. ONCE AGAIN, THAT BIG DROP IN ENERGY HELPING TO, YOU KNOW, LEAD THE ADVANCE WITH THE PACING WE'RE SEEING IN PRICES. ALSO SUPPLY CHAINS ARE FINALLY STARTING TO LOOSEN UP. THAT'S ANOTHER REASON WHY WE'RE NOT SEEING RUNAWAY PRICES AT THE WHOLESALE AND CONSUMER LEVEL RIGHT NOW. >> NOW, WHERE ARE THESE WEEKS, THE TWO INFLATION REPORTS, WE'VE GOT THE PRODUCER PRICE INDEX AND THE CONSUMER PRICE INDEX, WHAT DO THESE REPORTS COMBINED MEAN FOR THE FEDERAL RESERVE? THAT THE OTHER BIG WHEN EVERYONE'S WATCHING, RIGHT? WHEN IS THE FED GONNA DO? >> EXACTLY, THESE ARE TWO DATA POINTS, THE FED IS DEAFENING TAKING A VERY CLOSE LOOK AT THEM. THERE'S A LOT OF TIME BETWEEN NOW AND THEIR NEXT MEETING AT THE END OF SEPTEMBER, WE'RE GONNA GET A LOT MORE DATA POINTS. AT LEAST THESE TWO REPORTS SHOW THE FED THAT THE ECONOMY IS MOVING IN THE RIGHT DIRECTION. PERHAPS THE FED DOESN'T HAVE TO BE AS AGGRESSIVE AND MOVE AS BIG AS IT WANTED TO TO REIN IN INFLATION. THERE WAS TALK THAT MAYBE WOULD SEE IT THREE QUARTERS OF A PERCENTAGE POINT RISE AGAIN AND INTEREST RATES AT THE END OF SEPTEMBER. NOW, AFTER THESE TWO REPORTS TODAY, MORE INVESTORS BELIEVE WE COULD SEE A HALF POINT, POSSIBLY A QUARTER POINT RISE WHEN THE FED MEETS AGAIN. >> A GALLON OF REGULAR NATIONWIDE GAS IS NOW BELOW $4. SO, THAT'S THE FIRST TIME WE'VE SEEN THAT NUMBER THAT LOW SINCE MARCH. SO, WHEN YOU'RE LOOKING AT GAS PRICES SPECIFICALLY, DO EXPECT THOSE TO KEEP FALLING? >> RIGHT, SO, A GAS, ENERGY AND GENERAL MAKES UP SUCH A HUGE PART OF THE INFLATION PICTURE. THE FACT THAT STARTING TO COME DOWN DEFINITELY WELCOME RELIEF. A REASON WHY WE'RE SEEING THE PRODUCER PRICE INDEX AND CONSUMER PRICE INDEX NOT RISE AS MUCH, REMEMBER, YOU AND I WERE TALKING ABOUT GAS PRICES ABOUT $5 A GALLON BACK IN JUNE, THERE ARE NOW DOWN MORE THAN 20% FROM THEIR. ARE THEY GOING TO CONTINUE TO TREND LOWER? WELL, THERE'S LOTS OF QUESTION MARKS. GEOPOLITICAL EVENTS, I MEAN, WE STILL HAVE A WAR GOING ON IN UKRAINE, IT'S ALSO GONNA DEPEND ON HOW MUCH OUR REFINERIES ARE ABLE TO TURN OUT, WE'RE GONNA BE ENTERING THE THICK OF HURRICANE SEASON, IF THOSE KNOCK OUT SOME OF THE REFINERIES ALONG THE GULF, THAT COULD ALSO IMPACT THE OIL ON THE MARKET. THE INTERESTING THING, DIANE, WHEN PRICES SPIKED, DRIVERS IMMEDIATELY REACTED AND THEY ACTUALLY STARTED TO DRIVE LESS. THIS IS NOT SOMETHING WE NORMALLY SEE DURING THE BUSY SUMMER DRIVING SEASON. PEOPLE ACTUALLY DROVE LESS AND AUGUST THAN THEY DID IN JULY. A BIG REASON WHY IS THOSE PRICES. >> NOW, I ALSO WANT TO GET YOUR THOUGHTS ON THE JOB MARKET, BECAUSE MORE PEOPLE ARE APPLYING FOR UNEMPLOYMENT BENEFITS, SO, WHAT DOES THAT TELL YOU ABOUT THE HEALTH OF THE LABOR MARKET? THIS IS THE PART THAT WE KEEP HEARING, THAT SHOWS THE ECONOMY IS STRONG. >> THIS IS ANOTHER BIG PART OF THE FEDS PUZZLE, A TIGHT LABOR MARKET MEANS WAGES NATURE MAIN HIGH, MEANS THAT IT CONTINUES TO PUT PRESSURE ON INFLATION. THIS WEEK WE SAW THE NUMBER OF PEOPLE APPLYING FOR UNEMPLOYMENT BENEFITS RISING FOR THE SECOND STRAIGHT WEEK, NOW HANGING AT ITS HIGHEST LEVEL SINCE ABOUT NOVEMBER, STILL HISTORICALLY LOW LEVELS. IT TELLS US THAT WE STILL HAVE A TIGHT LABOR MARKET, THINGS ARE STARTING TO MODERATE, WE ARE SEEING SOME COMPANIES, ESPECIALLY IN THE TECH SECTOR, WHICH ARE VERY INTEREST RATE SENSITIVE, STARTING TO LAY OFF WORKERS OR HAVE HIRING FREEZES. OVERALL, THIS CONTINUES TO BE A VERY HEALTHY JOB MARKET. LAST WEEK, WE HEARD THAT THE ECONOMY ADDED MORE THAN 500,000 JOBS, AS A LOT OF COMPANIES DID LABOR SHORTAGES. INSTEAD OF LETTING PEOPLE GO, THEY'RE TRYING TO HOLD ON TO

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