Shares fell on Thursday morning as new consumer spending data reveals that Americans are cutting spending ahead of painfully high inflation.
The government report revealed that consumer spending increased to one slow rate of 0.2%. from April to May, weakening in the face of high inflation. The fastest price increases in four decades they are putting financial pressure on American households, particularly middle-class and working-class people.
The S&P fell 1.7%, down to 3,751, on the morning, while the Dow fell 1.5% or 476 points to 30,552. The highly technological Nasdaq fell 2.3%.
On Wednesday, the government confirmed that the U.S. economy contracted 1.6% in the first quarter, lowering a previous estimate.
Investors are worried about the signs that the world’s largest economy could have in the face of a recession due to rising interest rates imposed to cool rising inflation.
Consumer confidence is declining amid concerns about inflation
04:09
“Equity demand could remain silent for at least the next four to six months as interest rate hikes run across the U.S. economy,” Stephen Innes of SPI Asset Management said in a report .
Federal Reserve Chairman Jerome Powell at a European Central Bank meeting in Portugal said on Wednesday that “there is no guarantee” that inflation can be tamed without hurting the labor market.
Applications for U.S. unemployment benefits for the week ended June 25 were slightly lower than the previous week, although layoffs have risen from a 50-year low in March. There have been more layoffs in industries that have cooled recently, such as real estate, technology and cryptocurrency.
The global economy has also been affected The Russian invasion of Ukrainewhich raised the prices of oil, wheat and other raw materials.
In the energy markets on Thursday, the benchmark U.S. crude oil lost 96 cents to $ 108.82 a barrel in e-commerce on the New York Mercantile Exchange.
- In:
- Jerome Powell
- Economy
- Stock Market
- Gas prices
- Inflation
- China
- Coronavirus
- Asia
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