Us consumer prices rose more than expected in May, continuing months of rising inflation and raising the risk of rising inflation becoming more entrenched as the economy strengthens. According to a report released by the labor department on Thursday, the consumer price index rose 0.6% in may from a month earlier, down from 0.8% in April and the biggest increase since 2009. Core CPI, which excludes food and energy sources, rose 0.7 per cent, exceeding expectations. The median forecast in a previous Bloomberg survey of economists was a 0.5 per cent rise in both overall and core CPI. Compared with the same month a year ago, CPI jumped 5 per cent in May, the biggest annual increase since August 2008, but that figure is still distorted by the base effect. Prices in May 2020 were curbed by the COVID-19 epidemic, which led to higher year-on-year inflation in May.

Initial jobless claims in US states fell for the sixth consecutive week, in line with further improvements in the labor market and strong economic growth. Initial jobless claims under states' regular unemployment benefit programs fell by 9000 to 376000 in the week ended June 5, according to data released by the Labor Department on Thursday. The median forecast for economists surveyed by Bloomberg is 370000. Continued jobless claims fell by 258000 to 3.5 million in the week ended May 29, the biggest drop since mid-March.

The net worth of US households rose to a record high in the first quarter of this year, driven by further increases in share prices and house prices. According to a report released by the Federal Reserve on Thursday, household net worth rose by $5,000bn, or 3.8 per cent, to $136.9 trillion in the first quarter. Of this total, the value of shares held by families increased by $3.2 trillion, and the value of real estate increased by more than $968 billion. The figures highlight the protective effect of fiscal and monetary stimulus on American wealth. The trillions of dollars of stimulus in 2020 and the larger-than-expected fiscal stimulus package signed in mid-March are adding momentum to the stock market. In addition, the Fed has kept interest rates near zero. This led to record low mortgage rates and boosted demand for homes. The median selling price of second-hand homes is at a record high.

The use of the Fed's overnight reverse repo tool hit an all-time high for the fourth day in a row on Thursday. The 54 participating institutions made the use of $534.9 billion, surpassing the previous record high of $502.9 billion set on Wednesday. The increase was the biggest since June 3. The tool offers an overnight interest rate of 0%, helping to temporarily reduce the reserve balance in the banking system.

The European Central Bank reiterated its commitment to maintain a faster pace of emergency bond purchases to help the eurozone economy rebound from more than a year of crisis. "the governing board expects net purchases under PEPP in the next quarter to continue at a significantly faster rate than in the first few months of this year," ECB President Christine Lagarde and her colleagues said in a statement on Thursday. The European Central Bank also left interest rates, long-term loans to banks and an earlier bond-buying program unchanged. The decision highlights that while the eurozone's vaccination process and deregulation of anti-epidemic controls have created favourable conditions for an economic rebound, the ECB is still not prepared to reduce monetary stimulus. Three months ago, ECB policymakers accelerated their 1.85 trillion euro ($2.25 trillion) bond-buying program to rein in rising borrowing costs, and since then, several policy makers have said the economy is not ready for a loosening of support.

Central Bank of Canada policy makers are not worried about the recent surge in inflation, which they believe is mainly driven by temporary factors, according to a senior official. Speaking on Thursday after a decision-making meeting of the Bank of Canada on Wednesday, Tim Lane, deputy governor, said the rise in Canadian inflation above 3 per cent was one of the key issues discussed by policy makers this week. Lane said officials attributed higher-than-expected inflation to a low year-on-year base and that continued oversupply is expected to put downward pressure on prices once the base effect weakens. "by definition, these base effects are temporary-they will not last beyond the next few months," Lane said in a speech. "until we fully recover, what will continue is the potential surplus of the economy."

As part of a package of measures to combat climate change, G7 leaders will discuss an ambitious plan to shift the bulk of car sales from gasoline to clean energy vehicles by the end of the decade. According to a plan proposed in the documents seen by Bloomberg, the G7 governments will "strive" to ensure that "by 2030 or earlier", most of all new passenger cars sold are no longer gasoline or diesel-powered cars. There are still differences among countries on how specific the measures should be. All seven leaders at the summit in Cornwall, south-west England, will also pledge more money to help developing countries reduce carbon emissions, but the exact amount is unclear.

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