In this morning’s data, the Consumer Price Index increased 0.4% in October, less than expected, and is 7.7% higher on an annual basis. Monthly prices for Fuel Oil, up 19.8%, were strong, while monthly prices for Used Cars and Trucks, down -2.4%, Apparel, down -0.7%, and Utility Gas Service, down -4.6%, were weak. The core rate, which excludes prices for food and energy, increased 0.3% in October, also less than expected and half of the increase in the previous month. The core rate increased 6.3% on an annual basis. Meanwhile, Initial Jobless Claims were 225,000 for the week ending November 5th, slightly higher than expected and slightly higher than the previous week.
Overall, a welcomed report as the monthly figures for the core rate come in less than expected and half of what it was the previous month. In addition, decreases in prices for used cars and trucks as well as apparel indicate “goods” prices are showing some relief and hint that policy tightening by the Federal Reserve may be starting to have an impact. However, the labor market remains resilient with initial claims in the low 200k range and discussion of diesel fuel shortages kept fuel oil elevated during the month. The timing and speed of inflation coming off extremely elevated levels and when policy tightening hits the economy will be a key dynamic in the months ahead. Meanwhile, waiting for the final results from this week’s election has created some volatility in the markets this week.
In all, the 10-year US treasury yield ticks lower following the report and equity futures are higher as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
