US CPI data for the month of October 2022 has been released by the Bureau of Labor Statistics. US Inflation for October has come in at 7.7%. The September inflation was at 8.2% while in August the annual price rise was at 8.3%.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in October on a seasonally adjusted basis, the same increase as in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 7.7 percent before seasonal adjustment.
The all-items index increase of 7.7 percent for the 12 months ending October was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index ( core inflation) rose 6.3 percent over the last 12 months. The index for all items less food and energy rose 0.3 percent in October, after rising 0.6 percent in September.
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The expectation was that the core inflation would relax to 6.5% and headline inflation will moderate to 7.9%. The month-over-month core rate was expected to decline to 0.5% from 0.6%. The fight to keep inflation in check is still ongoing, and the US Fed still has work to do. The market will keep on concentrating on the core inflation statistics.
Post the October inflation data, it will be interesting to see if the Fed will keep its foot off the brake of the U.S. Economy. The markets are, however, expecting a 50 basis points rate hike in December keeping in context the Fed’s dot plot.
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Going by Powell’s statement earlier this month, it seems the Fed is trying hard to avoid a hard landing on the economy. Powell’s signal to the market is two-pronged – Fed may consider slowing down the pace of rate hikes and secondly, the terminal rate could be much higher than what the market is expecting. Such a message is bound to send signals for the market to take a view as far as current valuations of stocks are concerned.