- The Consumer Price Index rose 5.4% in July on an annual basis
- The IEA cut its 2021 global oil demand outlook by 100,000 barrels a day
- The NFIB Small Business Optimism Index fell 2.8 points to 99.7 in July
Top Three Market Headlines
Consumer Inflation Moderates Slightly but Remains Elevated: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.5% in July from the prior month, a slight deceleration from the monthly rise of 0.9% in June. Versus the prior year, the CPI increased at a 5.4% pace, unchanged from June. The "core" CPI, which excludes the volatile food and energy categories, rose 0.3% on the month, down measurably from 0.9% in June, partly due to a pause in rising prices for used cars, which had boosted the rate in prior months. Compared to the prior year, the core rate rose 4.3%, down slightly from the 4.5% increase reported in June.
IEA Downgrades 2021 Global Oil Demand Outlook: The International Energy Agency (IEA) last week downgraded its 2021 global oil demand outlook by 100,000 barrels a day on account of the Covid Delta variant that has led some countries to re-impose restrictions on economic activity. The IEA now expects demand to be shifted into next year, and accordingly upgraded its 2022 forecast by 200,000 barrels a day. At that projected pace, global oil demand would return to its pre-pandemic highs in the second half of 2022. The dampened 2021 forecast comes as the price of oil has fallen in recent weeks, with West Texas Intermediate crude oil futures prices closing at $67.65 per barrel last week, down from a nearly seven-year high of $75.25 in mid-July.
Small Business Sentiment Retreats in July: After posting strong results in the prior month, optimism among small business owners in the U.S. dipped in July, according to the National Federation of Independent Business (NFIB). The NFIB Small Business Optimism Index, which is based on surveys of small business owners, fell 2.8 points to 99.7 in July, retreating from its eighth-month high of 102.5 in June. Labor and inflation remained the top concerns of business owners, according to the July survey; 49% of owners reported struggling to fill job vacancies and 38% of owners raised wages to try to fill open positions.