The Federal Reserve has released a new report to Congress, stating that U.S. inflation has “stepped up further this spring” due to various factors, including the impact of tariffs, energy costs driven higher by conflict in the Middle East, and the booming buildout of artificial intelligence technology.
Inflation and Labor Market
The report notes that inflation has risen this year and remains elevated relative to the Federal Open Market Committee’s longer-run objective of 2%. The most recent data shows the U.S. central bank’s preferred Personal Consumption Expenditures Price Index running about double that rate as of May.
By contrast, the labor market has stabilized, with demand and supply roughly in balance. The June unemployment rate of 4.2% is still considered low. A marked slowdown in immigration and ongoing declines in labor force participation due to the aging of the population have led to a slowdown in labor supply growth.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
