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Wednesday, August 17, 2022

Fake US inflation report circulates a day before data release

The US Bureau of Labor Statistics was forced to publicly discredit a fake inflation data report that circulated on Tuesday, just one day before the scheduled release.

The document, which sought to mirror the formatting of the monthly consumer price index report, claimed annual inflation in June reached 10.2 per cent, much higher than economists’ forecasts of an 8.8 per cent jump.

But the chart featured in the forged report did not match the text, which was one of several signs it was fabricated.

“We’re aware of a fake CPI release image circulating on Twitter. It is a fake. Stay tuned for the real CPI release tomorrow at 8:30 AM ET,” the BLS wrote on Twitter.

While the fake document began circulating as early as 11:30am ET, US stocks dipped in mid-afternoon trade in New York as the false report gained traction.

The blue-chip S&P 500 index, which had been vacillating between small gains and losses throughout the day, fell into negative territory around 2pm ET for the remainder of the session. The S&P retraced part of that decline going into the close, ultimately ending the day down 0.9 per cent.

The tech-heavy Nasdaq Composite followed the same pattern as the S&P, also ending the day down 0.9 per cent.

June’s inflation report comes at an incredibly sensitive moment for financial markets and the US economy more broadly, as the Federal Reserve steps up its efforts to quell soaring prices.

Last month, the US central bank delivered the first 0.75 percentage point interest rate increase since 1994 after the May CPI report showed a sharp acceleration in the rate of inflation.

Economists expect another similar “jumbo” rate rise when the Fed meets at the end of the month. The White House this week has sought to manage expectations around the June figures, acknowledging that they will be “highly elevated” albeit “backwards-looking”.

Energy prices have fallen sharply recently, a trend that will not be captured in the data due out Wednesday.

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