Economic and jobs news thread

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What’s The Problem With 3.9 Percent Annual Wage Growth?
by Dean Baker
November 10, 2022

Introduction:

(Eurasia Review) Not much can surprise me these days, but I admit to being somewhat surprised when the near universal reaction to the October jobs report was that the Fed will have to keep raising interest rates. The key issue of course is whether the labor market is so tight that it is creating inflationary pressures in the economy.

The 261,000 job gain reported for the month can be seen as bad news in this respect. It is faster than we can sustain in an economy that is near full employment. But it is not that much faster, and other data indicated a strong, but more normal labor market, like we had in 2019.

The share of unemployment due to voluntary quits fell sharply from the record high reported in September. The 14.6 percent share is lower than in many pre-pandemic months. Average weekly hours remained at a normal pre-pandemic level, after having risen sharply earlier in the recovery. The rise was most likely due to employers having workers put in more hours when they were unable to hire additional staff. Presumably, they are no longer having as much difficulty in hiring.

But the most important argument against further rounds of aggressive rate hikes by the Fed was in the wage data. After seeing moderate growth in the hourly wage in both August and September, we got another moderate number for October. If we take the annualized rate over the last three months, it comes to 3.9 percent, that’s down from an annual rate of more than 6.0 percent last fall.

There are two important points about this wage growth number. The first is that the direction of change is unambiguously downward. Other wage series, like the Employment Cost Index or the unit labor costs from the Bureau of Labor Statistics productivity data show the same story, even if the drop is less dramatic.

Read more here: https://www.eurasiareview.com/10112022 ... wth-oped/

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It looks like the smart money liked the election results.

The 1% Move Report for November 10
November 10, 2022

Introduction:

(Morgan Stanley)
What Happened in the Markets?

• The S&P 500 rallied 5.5% Thursday to close at 3,956. Ninety-six percent of index constituents had positive returns. With the gains, the index has now fallen 17.0% year-to-date.

• All 11 S&P 500 sectors increased Thursday as Information Technology (+8.3%) and Real Estate (+7.7%) outperformed while Consumer Staples (+2.4%) and Energy (+2.2%) lagged.

• Thursday's CPI report showed that inflation in October was below the consensus expectations from both a headline and core perspective, causing a sharp rally across financial assets. US Headline CPI reported at 7.7% YoY, and 0.3% MoM, both below the estimates of 7.9% and 0.5%, respectively. Treasury bonds rallied, with 10-year yields dropping 25 basis points in the largest one-day fall since March 2020. This helped interest rate-sensitive equities outperform as growth and technology stocks led market gains. Commodities also saw strong upside moves as the US Dollar Index declined 2%, the largest daily drop since 2015.

• By the 4 pm equity market close, WTI oil was modestly higher to $86 per barrel. The US Dollar Index fell 2.3%, while gold improved 2.8% to $1,750 per ounce. Meanwhile, the 10-year US Treasury yield declined to 3.82% while the 2-year Treasury yield decreased to 4.33%. Bond markets are closed Friday in observance of Veteran's Day.

Read more here: https://www.morganstanley.com/content/ ... -20221110

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^^^More on that:

Markets Take Republican Midterm Losses in Stride With Inflation in Retreat
by Nick Rummel
November 10, 2022

Introduction:

MANHATTAN (Courthouse News) — Inflation data that show prices finally stabilizing brought welcome cheer to Wall Street this week before it could even properly mourn the midterms election results.

On Thursday, investors were gifted a rare treat: headline inflation came in under analyst forecasts. According to the Bureau of Labor Statistics, headline inflation picked up just 0.4% in October, compared with the 0.6% many had expected. Over the past 12 months, the inflation index has increased 7.7%, the smallest yearlong increase since January.

Equity futures rocked up within seconds of the report. Compounding moderate gains from earlier in the week, the Dow Jones Industrial Average gaining 800 points before the morning bell. By the finale of trading on Thursday — equity markets are open on Veterans Day, but bond markets are closed — the Dow picked up even more speed, gaining 1,198 for the day and 1,309 points since last week’s closing bell.

The S&P 500 and Nasdaq, both of which have had more tepid gains due to troubles among some technology companies, also ended up in positive territory for the week, gaining 185 points and 639 points, respectively, since last Friday.

Most of the price increases in October were due to gains in energy, which picked up 1.8% last month after three months of price declines, and more specifically the 19.8% increase in fuel oil prices. Shelter and transportation prices also continued to increase, both by 0.8% in October.

Also discussed is a noting of the election results on the market as well as plunging crypto markets. Other aspects of inflation are also briefly noted.

Read more here: https://www.courthousenews.com/markets ... -retreat/

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U.S. may skirt recession in 2023, Europe not so lucky - Morgan Stanley
Source: Reuters

Britain and the euro zone economies are likely to tip into recession next year, Morgan Stanley said, but the United States might make a narrow escape thanks to a resilient job market.

At the same time, China's expected reopening after almost three years of COVID-19 curbs is set to lead a recovery in its own economy and other emerging Asian markets, the investment bank's analysts said in a series of reports published on Sunday.

"Risks are to the downside," the reports said, projecting the global economy to grow by 2.2% next year, lower than the International Monetary Fund's latest 2.7% growth estimate.

Next year, Morgan Stanley predicts a sharp split between developed economies "in or near recession" while emerging economies "recover modestly" but said an overall global pickup would likely remain elusive. China's economy was predicted to grow 5% in 2023, outpacing the average 3.7% growth expected for emerging markets, while the average growth in the Group of 10 developed countries was forecast at just 0.3%.

Read more: https://www.reuters.com/markets/us-may- ... 022-11-14/

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Wholesale prices rose 0.2% in October, less than expected, as inflation eases

PUBLISHED TUE, NOV 15 2022 * 8:31 AM EST * UPDATED 7 MIN AGO

Jeff Cox

KEY POINTS

-- The producer price index rose 0.2% in October, below the 0.4% estimate.
-- A significant contributor to the slowdown in wholesale inflation was a 0.1% decline in services, the first outright decline in that measure since November 2020.
-- On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September.
-- In other economic news, the Empire State Manufacturing Survey for November registered a reading of 4.5%, much better than the estimate for a -6% reading.

Wholesale prices increased less than expected in October, adding to hopes that inflation is on the wane, the Bureau of Labor Statistics reported Tuesday. ... The produce price index, a measure of the prices that companies get for finished goods in the marketplace, rose 0.2% for the month, against the Dow Jones estimates for a 0.4% increase.

Stock futures tied to the Dow Jones Industrial Average were up more than 400 points shortly after the release, reflecting market anticipation that cost of living increases not seen since the early 1980s were easing if not receding.

On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September and off the all-time peak of 11.7% hit in March. The monthly increase equaled September's gain of 0.2%.

Excluding food, energy and trade services, the index also rose 0.2% on the month and 5.4% on the year. Excluding just food and energy, the index was flat on the month and up 6.7% on the year.

{snip}

Read more: https://www.cnbc.com/2022/11/15/wholesa ... eases.html

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Bearish Bets Build in the Stock Market
by Matt Phillips
November 18, 2022

Introduction:

(Axios) The market is actually up this month, but bearish bets are building fast.

The big picture: A measure of sentiment from the options markets shows that bets on falling stock prices have sharply outpaced those expecting prices to rise.

• This measure, known as the CBOE U.S. equity put/call ratio, has hit the highest — or most bearish — level on record in recent days.

How it works: The measure is a ratio of bets on falling prices, or "puts," versus bets on rising prices, known as "calls."
• During the zaniest days of the meme stock boom in January 2021, the put/call ratio fell to some of the lowest levels on record.
• That reflected near-manic levels of optimism, especially among retail investors, who were dominating the market.

Read more here: https://www.axios.com/2022/11/18/beari ... ck-market

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Big Tech Powers Down Devices as Economy Sputters
by Peter Allen Clark
November 18, 2022

Introduction:

(Axios) Tech giants are ditching several consumer device product lines as dark economic forecasts make cost-cutting a priority.

The big picture: Tech’s biggest bear market in two decades has spurred tens of thousands of layoffs and plummeting stock prices, as companies scramble to find ways to minimize the downturn’s long-term impact.

What’s happening: Amazon's reported plan to lay off about 10,000 workers, per the New York Times, will involve cuts to the retail giant’s devices organization, which covers "Kindle, Alexa, Fire tablets, Fire TV, Echo, Astro, Ring, Blink, Halo, and Luna" (per an Amazon jobs site), as well as cuts in retail and human resources.
• The Wall Street Journal said last week that internal documents showed Amazon’s devices unit had an operating loss of more than $5 billion a year.

Over at Meta, last week executives said the giant was shutting down its Portal smart display platform and smartwatch projects.

Read more of the Axios article here: https://www.axios.com/2022/11/18/big-t ... downturn

Read the Wall Street Jouranl article on Amazon here: https://www.wsj.com/articles/amazon-ha ... alertNEWS

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After Binging Last Week, Markets Slow Down to Digest Retail Sales and Earnings Reports
by Nick Rummel
Friday, November 18, 2022

Introduction:

MANHATTAN (Courthouse News) — Following one of the best rallies in years, Wall Street this week moderated its bearish reaction to disappointing corporate earnings reports and ebullience over more data showing inflation is being tamed.

All three indices had their up and down moments this week, but the extremes of weeks’ past were moderated to minor gains and losses. By Friday’s closing bell the Dow Jones Industrial Average was a the same exact point as last Friday: at 33,747 points. The S&P 500 and Nasdaq both ended up slightly down for the week, losing 27 points and 177 points, respectively.

Investors were bombarded with a number of data points this week. On Tuesday, the Bureau of Labor Statistics released its producer price index, which showed demand increased by only 2% in October, half of the forecast from the expert consensus. The data underline the belief that inflation is moderating, and investors reacted accordingly, with markets on Tuesday closing up moderately.

Prices decreased across the board, according to the report, but tucked within the data were nuggets that were even better than the overall headline. The production costs for passenger cars declined by the largest amount since May 2017, the prices of nonfood goods fell by 0.1% last month, and trade service prices declined by half a percentage point.

“The PPI report is further evidence that businesses are losing pricing power in a cooling economy,” said Bill Adams, chief economist at Comerica Bank, noting that business-to-business selling prices also are rising more slowly.

Read more here: https://www.courthousenews.com/after-b ... earnings/

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Unemployment claims rise to 240,000, highest since August
Source: AP

By PAUL WISEMAN an hour ago

WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose to the highest level since August but still remains low by historic standards.

The Labor Department reported Wednesday that 240,000 people applied for jobless aid last week, up by 17,000 from the week before. The four-week moving average of claims, which smooths out week-to-week volatility, rose by 5,500 to 226,750.

Applications for unemployment benefits are a proxy for layoffs and the current low levels shows that American workers enjoy extraordinary job security.

But it may not last.

Read more: https://apnews.com/article/business-2a0 ... osition_06

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Morgan Stanley One Percent Swing report for November 22, 2022

Introduction:

What Happened in the Markets?

• The S&P 500 rose 1.4% Tuesday to close at 4,004. This was the first time the S&P 500 Index closed above 4,000 since September 12th. With the gains, the index has now fallen 16.0% year-to-date.

• All 11 S&P 500 sectors rose Tuesday as Energy (+3.2%) and Materials (+2.2%) outperformed while Consumer Staples (+0.7%) and Real Estate (+0.5%) lagged.

• Equities moved higher as investors showed improved confidence in upcoming customer holiday shopping activity. Additionally, a number of better-than-expected earnings reports helped buoy sentiment, even as one major retailer highlighted inflation pressures on spending patterns. Additionally, ahead of tomorrow's release of the November FOMC meeting minutes, several Federal Reserve Officials spoke of slowing the pace of future rate hikes. Federal Reserve President Daly reminded investors that "the lags in monetary policy...likely take at least several quarters."

• By the 4 pm equity market close, WTI oil rose on potential OPEC+ cuts in output, up 1.4% to $81.2 per barrel, and the US Dollar Index declined modestly. The 10-year US Treasury yield decreased to 3.76% while the 2-year Treasury yield moved to 4.53%.

Read more here: https://www.morganstanley.com/content/ ... -20221122

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Private hiring increased by just 127,000 jobs in November, well below estimate, ADP reports

PUBLISHED WED, NOV 30 2022 * 8:15 AM EST * UPDATED 26 MIN AGO


KEY POINTS

-- Private companies added just 127,000 positions for the month, a steep reduction from the 239,000 in October and well below the 190,000 estimate.
-- Leisure and hospitality saw an increase of 224,000, but that was offset by losses in manufacturing, professional and business services, financial activities, and information services.

Private hiring slowed sharply during November in a sign that the historically tight labor market could be losing some steam, according to a report Wednesday from payroll processing firm ADP. ... Companies added just 127,000 positions for the month, a steep reduction from the 239,000 the firm reported for October and well below the Dow Jones estimate for 190,000. It also was the lowest total since January.

The relatively weak total comes amid Federal Reserve efforts to loosen up a jobs picture in which there are still nearly two open positions for every available worker. The central bank has raised its benchmark borrowing rate six times this year, but the unemployment rate is still 3.7%, near the lowest since 1969.

“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” said ADP’s chief economist, Nela Richardson. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”

The ADP report comes two days before the Labor Department releases its more closely watched nonfarm payrolls count. Economists polled by Dow Jones expect that report to show a gain of 200,000 after an increase of 261,000 in October. {snip} Pay increased 7.6% from a year ago, ADP said, though that was a slightly slower pace than the 7.7% reported for October.

{snip}

Read more: https://www.cnbc.com/2022/11/30/private ... ports.html

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The US economy's growth was stronger than expected in the third quarter
Source: CNN Business

New York CNN Business — The US economy grew much faster than expected in the third quarter, according to the latest gross domestic product report, which showed GDP rose by an annualized rate of 2.9%.

That’s an improvement from the initial government reading in October that showed 2.6% growth in economic activity, and better than the Refinitiv forecast of 2.7%. And it’s a marked turnaround from economic contractions of 1.6% in the first quarter of the year and 0.6% in the second.

The better-than-expected growth came as consumer spending increased more than in the goverment’s previous reading, while the value of imports was revised down. Imports are subtracted from GDP, which is the broad measure of economic activity within the country.

The strong reading does not necessarily remove the risk forecast by many economists of the US economy falling into recession at some point in the next year. But the stronger-than-expected growth shows the resilience of the economy as it deals with the headwinds caused by the Federal Reserve’s aggressive course of large interest rate hikes in an attempt to slow the economy in order to tame decades-high inflation.

Read more: https://www.cnn.com/2022/11/30/economy/ ... index.html

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Fed Chair Powell says smaller interest rate hikes could start in December
Source: CNBC

WASHINGTON – Federal Reserve Chairman Jerome Powell confirmed Wednesday that smaller interest rate increases are likely ahead even as he sees progress in the fight against inflation as largely inadequate.

Echoing recent statements from other central bank officials and comments at the November Fed meeting, Powell said he sees the central bank in position to reduce the size of rate hikes as soon as next month.

But he cautioned that monetary policy is likely to stay restrictive for some time until real signs of progress emerge on inflation. “Despite some promising developments, we have a long way to go in restoring price stability,” Powell said in remarks delivered at the Brookings Institution.

The chairman noted that policy moves such as interest rate increases and the reduction of the Fed’s bond holdings generally take time to make their way through the system. “Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” he added. “The time for moderating the pace of rate increases may come as soon as the December meeting.”

Read more: https://www.cnbc.com/2022/11/30/fed-cha ... ember.html

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One Percent Swing Report for November 30, 2022


Introduction:

(Morgan Stanley)
What Happened in the Markets?
• The S&P 500 rose 3.1% Wednesday to close at 4,080, leading the index to a 14.4% year-to-date decline.
• All 11 S&P 500 sectors rose Wednesday as IT (+5.0%) and Communication Services (+4.9%) outperformed while Industrials (+1.6%) and Energy (+0.5%) lagged.
• Today, Fed Chair Powell's remarks at the Brookings Institution in Washington, D.C. remained consistent with recent comments. During his report on "Inflation and the Labor Market," he reiterated that inflation is too high and that the fed funds rate will be higher for longer. He also noted that "the time for moderating the pace of rate increases may come as soon as the December meeting," which appeared to improve market sentiment.
• Additionally, there were a number of economic reports today including the second release of 3Q GDP, which showed stronger growth of 2.9% (vs 2.6% previously). The October ADP employment report indicated job growth slowed for the fourth month in a row, while Job Opening & Labor Turnover (JOLTS) data fell in October as new hires and job openings declined. The Chicago Purchasing Managers Index fell to the lowest level since May of 2020, with weaker new orders.
• By the 4 pm equity market close, WTI oil rose 3.1% to $80.6 per barrel. The 10-year US Treasury yield fell to 3.63% while the 2-year Treasury yield declined to 4.33%. The US Dollar Index decreased to 105.9.

Read more here: https://www.morganstanley.com/content/ ... -20221130

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Key inflation measure that the Fed follows rose 0.2% in October, less than expected
Source: CNBC

Inflation rose in October about in line with estimates, sending a sign that price increases at least might be stabilizing, the Commerce Department reported Thursday.

The core personal consumption expenditures price index, a gauge that excludes food and energy and is favored by the Federal Reserve, rose 0.2% for the month and was up 5% from a year ago. The monthly increase was below the 0.3% Dow Jones estimate, while the annual gain was in line.

The gains also represent a deceleration from September, which saw a monthly increase of 0.5% and an annual gain of 5.2%. Including food and energy, headline PCE was up 0.3% on the month and 6% on an annual basis. The monthly increase was the same as September, while the annual gain was a step down from the 6.3% pace.

The department also reported that personal income jumped 0.7% for the month, well ahead of the 0.4% estimate, and spending rose 0.8%, as expected. In another key report, a widely followed gauge of manufacturing activity posted its lowest reading in two and a half years for November.

Read more: https://www.cnbc.com/2022/12/01/key-inf ... cted-.html

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Payrolls and wages blow past expectations, flying in the face of Fed rate hikes
Source: CNBC

Job growth was much better than expected in November despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation. Nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%, the Labor Department reported Friday.

Economists surveyed by Dow Jones had been looking for an increase of 200,000 on the payrolls number and 3.7% for the jobless rate. The monthly gain was a slight decrease from October’s upwardly revised 284,000. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons edged lower to 6.7%.

The numbers likely will do little to slow a Fed that has been raising interest rates steadily this year to bring down inflation still running near its highest level in more than 40 years. The rate increases have brought the Fed’s benchmark overnight borrowing rate to a target range of 3.75%-4%.

In another blow to the Fed’s anti-inflation efforts, average hourly earnings jumped 0.6% for the month, double the Dow Jones estimate. Wages were up 5.1% on a year-over-year basis, also well above the 4.6% expectation.

Read more: https://www.cnbc.com/2022/12/02/jobs-re ... -2022.html

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Payrolls and wages blow past expectations, flying in the face of Fed rate hikes
Source: CNBC

Job growth was much better than expected in November despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation. Nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%, the Labor Department reported Friday.

Economists surveyed by Dow Jones had been looking for an increase of 200,000 on the payrolls number and 3.7% for the jobless rate. The monthly gain was a slight decrease from October’s upwardly revised 284,000. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons edged lower to 6.7%.

The numbers likely will do little to slow a Fed that has been raising interest rates steadily this year to bring down inflation still running near its highest level in more than 40 years. The rate increases have brought the Fed’s benchmark overnight borrowing rate to a target range of 3.75%-4%.

In another blow to the Fed’s anti-inflation efforts, average hourly earnings jumped 0.6% for the month, double the Dow Jones estimate. Wages were up 5.1% on a year-over-year basis, also well above the 4.6% expectation.

Read more: https://www.cnbc.com/2022/12/02/jobs-re ... -2022.html

More on that by Dean Baker:

Introduction:

(Eurasia Review) The economy added 263,000 jobs in November, again coming in ahead of expectations. Perhaps more importantly, wages continue to grow at a rapid pace, as the October average hourly wage was revised up by 6 cents. The annual rate of wage growth over the last three months was 5.1 percent, the same as the rate over the last year.

Wage Growth is Still Rapid

The rapid pace of wage growth paints a very different picture than we were looking at in October, where the annualized rate was just 3.9 percent. Since we should expect some shift back to wage income, reversing the shift to profits in the pandemic, this would have been roughly consistent with the Fed’s 2 percent inflation target. (There were periods in 2018 and 2019 when wage growth approached 4 percent.) The revised data, coupled with the 0.6 percent growth reported for November, indicate wage growth has yet to slow.

Workers at the Bottom Still Doing Well

Lower paid workers have seen the most rapid wage growth through the pandemic recession and recovery. That continues to be the case. The average hourly wage for production and nonsupervisory workers in hotels and restaurants is up 7.4 percent over the last year.

Read more here: https://www.eurasiareview.com/02122022 ... analysis/

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Equity Podcast Economic News
by Alex Wilhelm
December 5, 2022

Introduction:

(Techcrunch) Hello and welcome back to Equity, the podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

It is the first Monday of December, so this show is getting into the holiday spirit. And by that, we mean thinking far too much about the geopolitical-technological landscape, naturally.

Here’s what we got into on our Monday episode!

• Stocks in China are ripping higher on news that its drastic COVID-related policies could be starting to ease. It’s a long way from a reopening, but after years of hard-edged lockdowns, Chinese tech companies are breathing a sigh of relief — at least in valuation terms. Shares are down in Europe and the United States.

• How much are Chinese equities rallying? Bilibili is in the lead, up around 16% in pre-market trading. The day’s gains won’t cover all prior losses, but for the nation’s beleaguered tech industry, the valuation gains are beyond welcome news.

Read more (and/or listen to the podcast) here: https://techcrunch.com/2022/12/05/is-t ... els-like/ or listen to the podcast here:

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The One Percent Move Report for December 6, 2022

Introduction:[

(Morgan Stanley)
What Happened in the Markets?
• The S&P 500 declined 1.4% Tuesday to close at 3,941, leading the index 17.3% lower year-to-date. Nearly 80% of the S&P 500 constituents were down on the day.

• Ten of the 11 S&P 500 sectors fell Tuesday as Utilities (+0.7%) and Consumer Staples (-0.7%) outperformed while Communication Services (-2.6%) and Energy (-2.7%) lagged.

• Markets continued to consider sell-side analyst and strategist 2023 outlooks and implications on corporate earnings. Concerns over the continuation of higher rates, slowing growth, workforce reductions, and elevated wages due to higher demand for services led markets lower. The Federal Open Market Committee is in a blackout period until the next FOMC meeting December 13-14.

• By the 4 pm equity market close, WTI oil fell back 3.2% to $74.4 per barrel. The 10-year US Treasury yield returned to 3.52% while the 2-year Treasury yield declined to 4.35%. The US Dollar Index increased modestly to 105.5.

What to Watch Going Forward

• Monetary Policy: The next FOMC meeting is December 13-14. Following the November FOMC meeting, Fed Chair Powell announced a fourth consecutive 75-basis-point (bp) hike and reiterated that "there is still a way to go to get to a sufficiently restrictive level of monetary policy" that will allow for inflation to return to 2% over time. Fed Chair Powell emphasized that the discussion on how long to keep policy restrictive is most important and that it is premature to think about a pause in rate hikes. With core services inflation still rising and goods inflation higher than the Fed anticipated at this point in time, the clarity on when inflation will moderate sustainably is not apparent. During the Q&A session, Fed Chair Powell noted that "a soft landing is still possible, although the window has narrowed." MS & Co.'s Ellen Zentner expects a 50-basis-point hike in December, and a 25-basis-point hike at the January 31-February 1, 2023 meeting. Additionally, she anticipates rates will remain steady at the implied 4.625% level until December 2023 when a first rate cut of 25 bp may occur. Odds of a 50 bp hike at the December FOMC meeting are 100% while odds of a 75 bp hike are 7%, according to Bloomberg.

Read more here: https://www.morganstanley.com/content/ ... ve-202212

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Consumer prices rose less than expected in November, up 7.1% from a year ago
Source: CNBC

Prices rose less than expected in November, the latest sign that the runaway inflation that has been gripping the economy is beginning to loosen up. The consumer price index, which measures a wide basket of goods and services, rose just 0.1% from the previous month, and increased 7.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been expecting a 0.3% monthly increase and a 7.3% 12-month rate.

The increase from a year ago, while well above the Federal Reserve’s 2% target for a healthy inflation level, was tied for the lowest since November 2021. Excluding volatile food and energy prices, so-called core CPI rose 0.2% on the month and 6% on an annual basis, compared to respective estimates of 0.3% and 6.1%. Stocks roared higher following the report, with futures tied to the Dow Jones Industrial Average up more than 800 points initially before easing a bit.

Falling energy prices helped keep inflation at bay. The energy index declined 1.6% for the month, due in part to a 2% decrease in gasoline. Food prices, however, rose 0.5% and were up 10.6% from a year ago. Even with its monthly fall, the energy index was higher by 13.1% from November 2021. Shelter costs, which make up about one-third of CPI weighting, continued to escalate, rising 0.6% on the month and now up 7.1% on an annual basis.

The CPI report comes the same day the rate-setting Federal Open Market Committee begins its two-day meeting. Markets widely expect the FOMC on Wednesday to announce a 0.5 percentage point rate increase, regardless of Tuesday’s CPI reading. Inflation spiked in the spring of 2021, the result of numbers converging factors that took price increases to their highest levels since stagflation days of the early 1980s.

Read more: https://www.cnbc.com/2022/12/13/cpi-inf ... 2022-.html


From the source -




BLS-Labor Statistics
@BLS_gov
·
Follow
CPI for all items rises 0.1% in November as shelter and food increase https://bls.gov/news.release/cpi.nr0.htm
#CPI #BLSdata
8:30 AM · Dec 13, 2022