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Fed’s preferred inflation measure hit 40-year high in June

Yahoo Finance’s Julie Hyman discusses June core personal consumption index (PCE) data coming in slightly hotter than expected.

Video transcript

JULIE HYMAN: I'm Julie Hyman, with Brad Smith and Brian Sozzi, and we are looking at futures that are indicating a very slightly higher open on this Friday morning. This is after we got some economic data that we want to talk about in just a minute. But, first, let's run through the futures real quick.

We are seeing that little bit-- 17-point gain for the Dow futures. S&P futures looking at a bigger gain of about 1/2 of 1%, a dipping earlier after the data and then coming back to some extent. By the way, it looks like we are set for the best month on the S&P 500 that we've seen since November of 2020. That's how it looks in the futures. And then the NASDAQ 100 futures indicating a gain of 3/4 of 1%.

And a quick check as well of what's going on in the bond market and we are seeing a bump up in yields, a little one here, to 2.71%. We did get some news this morning on the economic front that does show maybe costs are not necessarily moderating or maybe they didn't in June at least. The PCE, the Personal Consumption Expenditures, deflator-- that is the preferred inflation measure of the Federal Reserve-- coming in with a 4.8% gain. That is the core figure, and it's a 1/10 of a percentage point hotter than estimated.

We also got the Employment Cost Index, which is designed to be a, sort of, more comprehensive view of employment besides just hourly wages, it too was a little bit hotter than had been estimated. So initially we saw a little bit of a dip in the futures and then we saw them come up again here this morning.

So this is something, obviously, you guys, that people have been watching really closely when it comes to the inflation figures. Yes, these are for June, it's a little bit older data. We're getting some confidence data coming out at 10:00 AM that we're going to be watching, but all of this feeding into the inflation picture, even as Elon Musk says maybe the worst is over for inflation.

BRIAN SOZZI: Maybe it is. Who are we to argue with somebody putting rockets into the sky?