It’s a mixed bag of consumer price data, with annual inflation continuing to slow in September, hitting a three-year low, although the report was slightly hotter than expected.
The Consumer Price Index (CPI) — a broad measure of the cost of everyday items — rose 0.2% in September from the previous month and was up 2.4% from a year ago, the Labor Department reported Thursday.
Economists expected inflation to slow to 2.3% annually and rise by 0.1% on a monthly basis.
Core prices, which exclude more volatile categories such as gasoline and food, rose 0.3% month-on-month and 3.3% from a year ago – slightly above economists’ expectations of 0.2% and 3.2%, respectively.
High inflation has placed significant financial pressures on most American families. Rising prices are especially difficult for low-income Americans, who tend to spend a larger portion of their paychecks on necessities, leaving less room for savings.
Much of the rise in core inflation in September came from a 0.2% rise in shelter costs compared to August. Over the past year, home prices have risen by 4.9%, accounting for more than 65% of the total 12-month increase in core inflation (excluding food and energy).
Other areas that saw notable price increases over the past year include vehicle insurance (+16.3%), medical care (+3.3%), personal care (+2.5%) and apparel (+1.8%). Food prices also rose by 0.4% on a monthly basis and 2.3% on an annual basis.
Overall, the report shows that inflationary pressures in the US economy continue to ease, although prices remain above the Fed’s 2% target. This keeps the Fed on track Next interest rate cut. The US central bank is scheduled to meet in November and is expected to cut borrowing costs by another 25 basis points.
But markets did not celebrate the slowdown in price growth. Instead, stocks showed mixed reactions, with modest selling occurring immediately after the report’s release. Subsequently, purchases rose, and the three major indexes fell. Standard & Poor’s 500Dow Jones and Nasdaq – recovered most of their losses during the day but still closed in the red. At the same time, the US dollar rose, with DXY rises above 103Recording its gains for the ninth day in a row.
Policymakers have also expressed concerns about rising risks in the labor market, and for good reason.
Initial jobless claims saw an unexpected jump, reaching a seasonally adjusted 258,000 for the week ending October 5. This is the highest total since August 5, 2023, with an increase of 33,000 from the previous week, well above expectations of 230,000.
Continuing claims, which are tracked a week later, rose to 1.861 million, an increase of 42,000.
Track unemployment claims numbers Damage caused by Hurricane Helenwhich struck on September 26 and affected much of the southeast. Florida and North Carolina, two of the hardest-hit states, recorded a combined increase of 12,376.
A 33,000 Boeing workers strike It may also have affected the numbers. Michigan saw the largest increase in claims, up 9,490 during the week.
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