Wall Street soars and the dollar crashes as US inflation falls to 7.7%.work
US Inflation Falls to 7.7%
Last minute: US inflation fell short of expectations last month, a welcome sign that price spikes may be waning.
The US consumer price index is 7.7% October was down from 8.2% in September, a bigger drop than expected.
This is the lowest annual inflation rate since January 2022. This news will help the Federal Reserve and the White House fight inflation.
In October alone, prices were up 0.4%.
of Bureau of Labor Statistics It reports:
The housing index contributed more than half of the monthly all-item growth, while gasoline and food also rose.
Core inflation also declined.
Excluding food and energy, underlying inflation rose by 0.3% in October, down from 0.6% in September.
Annual core inflation fell to 6.3% from 6.6%.
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Declining U.S. inflation S&P 500 The US stock index is set to have its best day in over two years, up 3.7% before the open.
Nearly all 30 companies in the Dow Jones Industrial Average are up.
salesforce.com Top risers up 6.5%, followed by DIY chains House Depot (+5.4%), software giant Microsoft (+5.5%), sportswear group Nike (+5.2%).
Technology company valuations have benefited from lower inflation (which makes current and future earnings more valuable). Lower inflation could give retailers a boost if people have more disposable income.
wall street soaring
Wall Street rose sharply at the opening as lower US inflation cheered investors.
of Dow Jones Industrial Average We got 900 points, or 2.8%. Nasdaq 5% increase.
Traders are optimistic that inflation may have peaked.
Capital Economics told clients:
October’s stronger-than-expected 0.3% month-on-month rise in core consumer prices is not enough to persuade the Fed to back off its hawkish stance.
However, this marks the beginning of a much longer-term disinflationary trend, with the Fed halting its tightening cycle early next year when policy rates peak at 4.50% to 4.75%, before cutting rates again. We anticipate that it will be persuaded to start End of 2023.
Quilter: America’s worst inflation may be past
Stuart ClarkPortfolio Manager Quilter Investors, America warns it’s still stuck in the inflationary forest….but the worst may be over:
“U.S. inflation has fallen again, giving some momentum to the idea that the worst is behind us. However, it’s worth noting that we’re not completely out of the forest yet, as food and housing are still increasing.
But inflation also remains stubbornly high, and the Federal Reserve will remain in a hawkish mood for the time being.
The job market remains strong, so unless inflation rises this much and the economy comes to a complete halt, the market will have to wait for a pivot or a halt sign from the central bank.
Wall Street futures soar
Wall Street futures surged, with the Dow Jones Industrial Average opening 800 points higher and gaining more than 2%.
European investors are also joining the party, with London’s blue chip FTSE 100 index up 80 points or 1.1%.
US Inflation Rate Today I confirm the suggestion that the peak may have disappeared under the rear-view mirror, says Neil ShahManaging Director Edison Group.
Still, the Fed may eventually raise interest rates to 5% (currently between 3.75% and 4%, the highest since early 2008) to keep inflation under control.
At the same time, stubborn core inflation continues and reports of continued tightness in the labor market have accelerated wage inflation, presenting a longer-term and more entrenched inflation challenge for fiscal and monetary policymakers.
As Fed Chairman Jerome Powell noted at the November meeting, the FOMC’s December decision is likely to be a 0.5% rate hike, but a higher-than-expected end-of-year rate of over 5% remains a threat to global markets. It will be a difficult target to digest.
Traders have been looking for signs of a peak in inflation for months. Can we finally get there?
US inflation still good Prices rose much faster than average wages last year and exceeded the Fed’s 2% target.
But in the end we are heading in the right direction.
US inflation, details.
Food prices continued to rise at a painful pace last month.
The food index rose by 0.6% over the month, while the home food index rose by 0.4%. Meat, poultry, fish and eggs rose 0.6%, while cereals and bakery products rose 0.8%.
On an annual basis, food inflation was 10.9%, while energy costs were 17.6% higher than a year ago.
Shelter, car insurance, recreation, new cars, and personal care all increased in October.
However, prices for used cars and trucks, medical, apparel, and the Air Freight Index fell over the month (although all sectors were at prices over a year old).
America’s cost of living crisis appears to be easing, says leading economist Mohamed El-Erianadvisor Allianz (and Chancellor of Queen’s College Cambridge):
He believes lower inflation could help the Fed mitigate a rapid rise in interest rates.
Dollar falls on US inflation report
The dollar plunged last month as US inflation plummeted more than expected.
Traders expect the US Federal Reserve may not need to raise interest rates as much as feared.
This sent the pound skyrocketing by more than 2 cents against the US dollar to near $1.16.
US Inflation Falls to 7.7%
Last minute: US inflation fell short of expectations last month, a welcome sign that price spikes may be waning.
The US consumer price index is 7.7% October was down from 8.2% in September, a bigger drop than expected.
This is the lowest annual inflation rate since January 2022. This news will help the Federal Reserve and the White House fight inflation.
In October alone, prices were up 0.4%.
of Bureau of Labor Statistics It reports:
The housing index contributed more than half of the monthly all-item growth, while gasoline and food also rose.
Core inflation also declined.
Excluding food and energy, underlying inflation rose by 0.3% in October, down from 0.6% in September.
Annual core inflation fell to 6.3% from 6.6%.
Hundreds of workers at the housing charity Shelter are planning a two-week strike in December to demand better wages.
The strike, which involves more than 500 shelter workers, started on December 5 and will last until December 18.
This shows the extent of the cost of living crisis as workers across the economy have been hit hard by rising inflation.
In a quote provided by the Unite union, an unnamed member of the shelter’s staff said:
At a minimum, people working for housing charities should not experience housing insecurity because they cannot pay their rent.
Twelve railroad drivers are set to go on strike on November 26 amid a long-running dispute over wages. Aleph The union announced (via PA Media).
https://www.theguardian.com/business/live/2022/nov/10/next-ceo-lord-wolfson-brexit-foreign-workers-uk-economy-us-inflation-ftx-bitcoin-business-live Wall Street soars and the dollar crashes as US inflation falls to 7.7%.work