US September CPI data or upside risk, core CPI is concerned

The US will release the Consumer Price Index (CPI) data for September next Thursday, which may bring some upside risks, especially the core CPI. The preliminary value of the S P Global Purchasing Managers' Index shows that corporate purchasing prices have risen at the fastest pace in six months. Although the ISM manufacturing survey shows a decline, non-manufacturing reports confirm that price pressures are accelerating. Therefore, if the data shows that inflation continues, more investors may believe that the Federal Reserve will continue to implement its plan to cut interest rates by 25 basis points each in November and December.

 

Jim Baird, Chief Investment Officer of Plante Moran Financial Advisors, said, "Following a series of relatively weak employment data over the summer, the September employment report is exactly what the Fed wants. It breaks recent trends and provides optimistic reasons for the labor market to remain resilient." He added that while the report will not change the economic outlook, it should ease any concerns about the labor market from investors or the Fed. Earlier this week, Fed Chairperson Jerome Powell said he did not want to see further weakness in the labor market. One of the main reasons for the Fed's decision to cut interest rates by 50 basis points last month was the slowdown in hiring and the rise in unemployment earlier this year.