The US Bureau of Labor Statistics has released the October CPI data, a crucial economic indicator for global investors. The October Consumer Price Index will be released on Wednesday, followed by the Producer Price Index and weekly jobless claims on Thursday and retail sales data on Friday.
The all items index rose 2.6 percent for the 12 months ending October, after rising 2.4 percent over the 12 months ending September. The all items less food and energy index rose 3.3 percent over the last 12 months.
The annual core consumer price inflation rate in the United States, which excludes items such as food and energy, stood at a three-month high of 3.3% in October 2024, unchanged from September and in line with market estimates.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in October, the same increase as in each of the previous 3 months. Over the last 12 months, the all-items index increased 2.6 percent before seasonal adjustment.
The index for all items less food and energy rose 0.3 percent in October, as it did in August and September.
Effective with October CPI data, the CPI program has used secondary source medical claims data for the private insurance portion of the physicians’ services and outpatient hospital services indexes.
The annual inflation rate in the US accelerated to 2.6% in October 2024, up from 2.4% in September which was the lowest rate since February 2021, and in line with market expectations.
It marks the first increase in inflation in seven months. On a monthly basis, CPI rose by 0.2%, consistent with the previous three months, also matching forecasts. The index for shelter rose 0.4%, accounting for over half of the monthly all items increase.
Meanwhile, core inflation remained steady at 3.3% as expected, with monthly core inflation also holding at 0.3%, the same as in September.
Fed has started a rate cut campaign as inflation has been on its way down. The Fed has dropped interest rates by 75 basis points. First in September, Fed cut rate by 50 bps and then 25bps in November’s FOMC meeting. The next FOMC meeting is on December 17-18.
US Fed chair Powell and FOMC members may face a tough time as Trump’s tax cuts and tariffs may lead to inflation, potentially impacting the rate cut campaign.
Meanwhile, the S&P 500 and Nasdaq 100 are up by 30%, and the Dow 30 is up 26% over the previous 12 months. How the Santa Clause rally in 2024 plays out remains to be seen before Trump takes office as the 47th President of the United States of America on January 20, 2025.