BLS News Release Delivers Optimism as CPI Holds Steady in October

According to the latest news release by the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index for all Urban Consumers (CPI-U) held steady in October, after increasing 0.4% in September, while the so-called core consumer price index, which excludes food and energy, rose 0.2 percent after rising 0.3 percent in the previous month. The positive indication led to the S&P 500 index opening higher and Treasury yields significantly declining as “traders essentially wiped out the chance of another rate hike,” as well as placing “forward bets on when rates the Fed will first cut rates into the first half of next year.” Furthermore, shelter prices, which account for about a third of the overall CPI index rose 0.3% — or about half the prior month’s pace with the sustained moderation in this category key to bringing core inflations down to the Fed’s 2% target. Despite Americans’ wages rising for the first time in three months, when adjusted for inflation, household budgets remain strained as grocery prices continue to rise along with motor-vehicle insurance. The length at which Americans can sustain spending levels, which has kept inflation elevated and driven broader growth, will depend upon the direction of the labor market which saw an increase in the unemployment rate to the highest level since early 2022 in October. Concerns have also arisen of a possible government shutdown by the end of this week, which comes less than two months after the nation’s lawmakers avoided one in the eleventh hour.