Wireless Bill Spike Helped Push Fed to First Rate Hike in Three Years

MacroIndustry

โดย Yahoo Finance·

Summary · why it matters

A steep 5.9% jump in Americans' wireless bills from July to August, the largest single-month increase since the Bureau of Labor Statistics began tracking the category nearly two decades ago, helped persuade the Federal Reserve to raise interest rates for the first time in three years. The surge followed T-Mobile's late-July decision to retire over 1,000 older plans, shifting customers to newer offerings at an added cost of as much as $6 per line per month, and AT&T's Aug. 5 rate hikes of $10 to $20 on some older plans plus a $1 increase in a monthly per-line fee. Wall Street analysts estimate the category contributed about 10 basis points of August's 0.3% month-over-month rise in core consumer prices, cementing expectations for the Fed's 25 basis-point hike on Wednesday. Carrier spending on new sites and expanded network capacity topped $30 billion last year, according to the industry trade group CTIA, while taxes, fees, and government surcharges reached a record 27.6% of the average wireless bill, per the Tax Foundation. Bank of America strategists called the August CPI jump in phone service a one-off tied to AT&T's changes, though cheaper options from mobile virtual network operators like Spectrum Mobile and Boost Mobile remain available for consumers willing to shop around.

AT&T Inc. ▲

T-Mobile US Inc ▲

Impact on stocks 8

Cloud & Digital Infrastructure▲ · 4 stocks

AT&T Inc.

▲ PositivePricingrelevance

AT&T's Aug. 5 rate hikes of $10-$20 on older plans plus a $1 per-line fee increase lifted its wireless revenue and helped drive the CPI phone-service spike.

T-Mobile US Inc

TMUS

▲ PositivePricingrelevance

T-Mobile's late-July retirement of over 1,000 older plans shifted customers to pricier offerings, adding up to $6 per line per month.