The Consumer Price Index released by the U.S. Bureau of Labor Statistics increased by 3% year over year, down from 3.3% in May. The figure, which measures a wide range of goods and services, beat Wall Street projections of a 3.1% increase, and represented the third straight month that inflation has cooled. The core price index, which strips out food and energy because of their sometimes-volatile price swings, rose by 3.3% year over year, also besting expectations by economists for a 3.4% increase.
Gold rocketed more than 2% at one point as it crossed the $2,400 per ounce threshold in late Thursday morning trading, nearing the lofty levels it reached during its record highs of mid-May. The yellow metal was up $40.27 at $2,413 per ounce. Silver, meanwhile, also benefited from the data suggesting that inflation was on the retreat, trading up $0.50 at $31.36 per ounce.
Thursday’s data provided a critical piece of support for investors who have lobbied federal policymakers to cut interest rates for months. Shortly after the CPI report was issued, the likelihood of a rate adjustment in September jumped to nearly 93%, according to the CME FedWatch Tool.
Additionally on Thursday, the Department of Labor reported that 222,000 workers applied for unemployment benefits for the week ending July 6 – 17,000 less than the previous week’s revised total of 239,000. Wall Street expected a figure around 236,000 applications.
Earlier this week, Federal Reserve Chairman Jerome Powell told federal lawmakers that the U.S. has notched “considerable progress” in working to bring down inflation to the Fed’s 2% target. Powell also noted that “the risks to achieving our employment and inflation goals are coming into better balance.”