Overview: Over the past week, the major inflation reports received most of the attention from investors. Although some of the data was slightly stronger than expected, its impact was relatively minor, and mortgage rates ended the week with little change.
While there are many inflation indicators released each month, the Consumer Price Index (CPI) is one of the most widely followed by investors. To reduce short-term volatility and get a better sense of the underlying inflation trend, they generally prefer to look at core CPI, which excludes food and energy. In September, core CPI rose 0.3% from August, slightly above the consensus forecast. On an annual basis, it was 3.3% higher than a year ago, up from an annual rate of increase of 3.2% last month, which was the lowest level since April 2021.
Although this annual rate is down significantly from a peak of 6.6% in September 2022, it is still far above the readings around 2% seen early in 2021, which is the stated target level of the Federal Reserve. One of the biggest challenges for the Fed in bringing down inflation has been persistently high shelter costs, which are essentially the price of housing. In September, shelter costs were a substantial 4.9% higher than a year ago. Other categories with large increases this month included apparel, used car prices, and medical care services.
Another significant inflation indicator released this week which measures costs for producers was very close to the consensus forecast. The core Producer Price Index (PPI) was 2.8% higher than a year ago, up from an annual rate of 2.4% last month. Investors place less weight on PPI because it represents a smaller portion of the economy than CPI.
Core CPI (annual % change)
Week Ahead
Oct. 17
Retail Sales report
Oct. 18
New Residential Construction Report (also known as Housing Starts)
Oct. 23
Existing-Home Sales report
Oct. 24
New-Home Sales report
コメント