Markets

U.S. Consumer Prices Unchanged in July as Fuel Costs Retreated

Published

8 years ago

August 16, 2016

The U.S. cost of living was little changed in July, a sign subdued inflationary pressures will give Federal Reserve policy makers reason to keep interest rates low.

It was the first time in five months the consumer-price index failed to advance and followed a 0.2 percent gain in June, Labor Department figures showed Tuesday in Washington. Excluding food and energy, prices rose 0.1 percent, less than projected.

Inflation continues to tread below the Fed’s goal as U.S. companies remain challenged by frugal consumers and competition from cheap goods made overseas. With price pressures elusive, central bankers will be less willing to raise borrowing costs.

“The Fed still has plenty of time before raising rates,” Scott Brown, St. Petersburg, Florida-based chief economist for Raymond James Financial Inc., said before the report. “The belief was that disinflationary pressures will go down and then inflation will move to the Fed’s goal, but it seems that may take longer.”

Housing Starts

Also Tuesday, a Commerce Department report showed housing starts unexpectedly climbed in July to the second-highest pace of the economic expansion, indicating the housing industry remains an area of strength for the economy.

The reading on the consumer-price index matched the median forecast in a Bloomberg survey of 82 economists. Estimates ranged from a decline of 0.1 percent to a gain of 0.2 percent.

Prices increased 0.8 percent in the 12 months ended in July, after rising 1 percent in the year through June.

The increase in the core CPI measure, which excludes volatile food and fuel costs, was the smallest since March and fell short of the 0.2 percent gain projected in the Bloomberg survey. The gauge was up 2.2 percent from July 2015, following a 2.3 percent advance in the year ended June.

Energy costs fell 1.6 percent from a month earlier, the first drop in five months, while food prices were little changed.

Hotels, Airlines

The biggest slump in hotel room rates in eight years and the largest drop in airline fares since July 2015, offset continued rent increases, which had been propping up core consumer prices. Medical care costs rose 0.5 percent, the biggest gain since February.

The Fed’s preferred gauge of inflation, which is the Commerce Department’s personal consumption expenditures measure, hasn’t matched the central bank’s 2 percent goal since 2012.

The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60 percent of the index covers prices consumers pay for services from medical visits to airline fares, movie tickets and rents.

The steady cost of living boosted paychecks in July, a separate report from the Labor Department showed Tuesday. Hourly earnings adjusted for inflation rose 0.4 percent in July from the prior month, the biggest gain since January, and were up 1.7 percent over the past 12 months.

Up Next

Housing Starts in U.S. Climbed to a Five-Month High in July

Don't Miss

European Stocks Fall in Broad-Based Slide; Electrolux Declines

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Comments

Energy

FG Set to Unveil Nigeria’s Largest 15 Million-Litre Aviation Fuel Depot in Lagos

Published

1 day ago

October 12, 2024

Bassey Marshall

The Federal Government has announced plans to unveil a 15 million-litre aviation fuel depot in Lagos State on October 17, 2024.

This announcement was made by the Group Managing Director of Masters Energy and Chairperson of the JUHI-2 Board, Mrs. Patience Dappa, via a statement on Thursday.

Dappa revealed that the Joint User Hydrant Installation 2 (JUHI-2), which she described as the largest airside jet fuel depot in Nigeria, will mark a significant transformation for the nation’s aviation sector.

She disclosed that the facility will be located near Murtala Muhammed International Airport, Lagos, and will serve as a storage and supply hub for the airport and other nearby airbases.

Dappa stated, “The Nigerian aviation industry is poised for a significant transformation with the upcoming commissioning of the Joint User Hydrant Installation 2, the country’s largest airside jet fuel depot. The facility will officially open on October 17, 2024, at the JUHI-2 Facility located off the Murtala Muhammed International Airport road, Lagos.

“The depot will serve as a crucial storage and supply hub for jet fuel, ensuring a steady fuel supply to Murtala Muhammed International Airport, MMA2, MMA1, and nearby airbases.”

Meanwhile, the Managing Director/Chief Executive Officer of Eterna Plc and Chairman of the JUHI-2 Commissioning Committee, Abiola Lawal, described the facility as a state-of-the-art depot, adding that it will meet fuel demands and enhance aviation operations in the country.

Lawal revealed that the depot will be unveiled by the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, and the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri.

According to him, “This state-of-the-art depot will significantly enhance aviation operations, meeting the fuel demands of a wide range of flight activities.

“The commissioning event will be attended by key stakeholders from the aviation and energy sectors and will be officially presided over by the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, SAN, and the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri.

“JUHI-2 is a joint venture between Eterna Plc, Masters Energy, Techno Oil, Quest Oil, Rahamaniyya, Ibafon Oil, and First Deep Water Limited.

The facility spans 46,000 square meters and boasts a storage capacity of 15 million litres of Jet A1 fuel.

“Its cutting-edge design includes the latest filtration systems, the ability to load four bowsers simultaneously, a jet fuel discharge system with four dedicated trucks, a modern laboratory, and state-of-the-art fire prevention measures. The depot’s advanced operational support facilities position it as the best of its kind in Nigeria.”

Crude Oil

Brent, WTI Benchmarks Settle Lower as Investors Weigh Supply, Demand

Published

1 day ago

October 12, 2024

Iyanuoluwa Martins

Oil prices settled lower on Friday with Brent crude oil futures settled down 36 cents, or 0.45%, at $79.04 a barrel, while the US West Texas Intermediate (WTI) crude futures settled down 29 cents, or 0.38%, to $75.56 per barrel.

Investors weighed factors such as possible supply disruptions in the Middle East and Hurricane Milton’s impact on fuel demand in Florida.

For the week, however, both benchmarks rose by more than 1 percent.

Market analysts warned that development over Israel continues to hold over the market even after weeks since Iran’s massive missile attack.

There are talks that if Israel destroys Iran’s oil and gas infrastructure, prices will rise.

Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on October 1, raising the prospect of retaliation against Iranian oil facilities.

However, Israel has yet to respond.

US President Joe Biden has warned Israel against hitting oil facilities in Iran, one of the world’s biggest producers.

Iran has warned that any attack on its infrastructure would provoke an even stronger response, with analysts warning that it could resort to placing pressure on important transit chokepoints like the Strait of Hormuz.

For years, Iran has threatened to block the strategic Strait of Hormuz, through which around 20% of the world’s oil supply flows.

A major disruption to the flow of oil and gas from the Middle East would affect the Chinese economy, which has faced its own challenges.

China imports an estimated 1.5 million barrels of oil a day from Iran, accounting for 15% of its oil imports from the region.

Weather development in the US weighed on prices as Hurricane Milton blew through Florida, leading to petrol shortages as drivers stocked up ahead of the hurricane.

There are indications that the destruction could go on to dampen fuel consumption in the hurricane’s aftermath.

Florida is the third-largest petrol consumer in the US, but there are no refineries in the state, making it dependent on waterborne imports.

Energy

FG Says Oil Marketers Can Now Buy Petrol Directly From Dangote Refinery

Published

1 day ago

October 12, 2024

Ugwoke Ogbodo

The Federal Government has said all petroleum marketers can now negotiate and buy products directly from the Dangote Refinery, Lagos.

A statement by the Ministry of Finance indicated that the decision to allow oil marketers to deal directly with the refinery firm was reached at a meeting of the technical committee headed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.

The meeting was held in Abuja on Friday.

The leeway given by the Federal Government has ended the arrangement in which the Nigerian National Petroleum Company Limited (NNPCL) was acting as the sole off-taker of the Dangote Refinery products.

Edun said its decision followed the directive of the Federal Executive Council (FEC) and the implementation of the new Naira-based sales mechanism, adding that the Implementation Committee on the Sales of Crude Oil and Refined Products in Naira, of which he chaired held its second review meeting on Wednesday, October 10, 2024.

He said the meeting focused on assessing the transition towards a deregulated market structure for Premium Motor Spirit (PMS) and addressing the change in the purchasing model for petroleum product marketers.

Giving key update on New Direct Purchase Model, the minister said the most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries, saying that this marks a departure from the previous arrangement where the NNPCL served as the sole purchaser and distributor of PMS from the refineries.

According to him, “This direct purchasing mechanism allows marketers to negotiate commercial terms directly with the refineries, fostering a more competitive market environment and enabling a smoother supply chain for petroleum products.

“Local Production of PMS: With the commencement of local PMS production, the market is better equipped to support these direct transactions. This transition is expected to enhance efficiency in product availability and stabilize market conditions for the benefit of all Nigerians.”

Edun stated that the committee recognizes that there are questions and discussions regarding this change in the market structure, adding, “We are committed to providing clarity on this development and will continue to engage with stakeholders to ensure a seamless transition process the Minister informed.”

He described the direct purchase of PMS by petroleum product marketers as a new era of growth and development for Nigeria’s petroleum industry and reassured stakeholders that the Committee will continue to provide clarity and engage with stakeholders to ensure the success of this new regime.”