The pressure is still on, following yesterday’s 15 year Consumer Confidence index low, with markets down and oil prices sending petrol to a record high.
Global pressure has increased with rising inflation rates in May for Asia and Europe, while the US economy has taken another fall with the US Government posting a record $US165.93 billion budget deficit in May, fuelled by federal spending from economic stimulus checks.
The Fed published their “beige book”, saying retailers have only had mixed success competing against rising oil and food prices. However, some limited growth there has spurred talk of an interest rate rise after Fed chief Ben Bernanke promised to keep pressure on inflation.
Global pressure also saw the Aussie dollar take a hit too, falling below yesterday’s four-week low to US94.64 cents this morning.
Any downward oil changes yesterday were offset by a $US5 leap last night, seeing petrol prices rise to a record of A166.9 cents a litre, and barrel prices creeping closer to the record of $US140 last week. Increasing pricing pressure has seen median inflation expectation rise 0.7% in June, according to The Melbourne Institute, the highest rise the survey has recorded.
But good news for interest rates: according to ABS Labour Force data, unemployment has remained steady at 4.3%, with the 17,900 workers dropping out of the market offset by 18,000 employment seekers.
Today’s markets are still falling, with the sharemarket dropping 2.8% this morning, and the benchmark S&P/ASX200 index falling 119.1 points to 5348.2 at 11.30am AEST.