Among other major issues (e.g. war, pandemic, etc.) next week’s Good Friday shortened trading week will be impacted the BLS’s inflation report.
The inflation rate is currently at 7.9% and expectations are for a further increase to 8.5%.
Today’s chart helps prepare for next week’s report by presenting six inflation rate ranges versus the ensuing average S&P 500 12-month gain.
The stock market has performed better following a relatively low inflation rate.
However, when the inflation rate reached an extremely high level (i.e., greater than 6%) as is currently the case, the stock market performed fairly well over the following 12 months.
What was the lowest U.S. inflation rate in history?
The lowest U.S. inflation rate since 1948 occurred in August 1949 and clocked in at a -3.0%.
What was the highest U.S. inflation rate in history?
The highest U.S. inflation rate since 1948 occurred in March and April of 1980 with a rate of 14.6%.
What is the inflation rate in 2022?
Inflation in 2022 is 7.5%.