"The U.S. Bureau of Labor Statistics reported a surprise decline in wholesale inflation, represented by the producer price index (PPI), yesterday, boosting the Vanguard S&P 500 ETF ( NYSEMKT: VOO). This morning, we got the complementary set of inflation numbers - the consumer price index (CPI). Unfortunately for the economy, the news here isn't as good. The CPI rose 0.4% in August, faster inflation than the 0.3% increase that economists had projected."
"Annualized, the inflation rate right now is 2.9%, which is more than the 2% annual inflation rate that the Federal Reserve targets - although it's not worse than the 2.9% rate that economists were predicting. So-called "core" CPI inflation, which excludes changes in food and energy prices, was 3.1%, up 0.3%. The Labor Department also had news for us today on the employment front. For the week ending September 6, unemployment compensation filings increased by 27,000 to a seasonally adjusted 263,000."
"Taken in tandem, worse inflation poses a problem for the Federal Reserve's presumed plan to lower interest rates next week (because lower interest rates can accelerate inflation even more - not the result the Fed wants to see). On the other hand, if the jobs picture is getting worse, then the Fed may still want to cut interest rates to goose the economy higher."
The U.S. Bureau of Labor Statistics reported a surprise decline in wholesale inflation, represented by the producer price index (PPI), which boosted the Vanguard S&P 500 ETF (VOO). The consumer price index (CPI) rose 0.4% in August, above the 0.3% forecast, with an annualized rate of 2.9% and core CPI at 3.1% (up 0.3%). Unemployment compensation filings increased by 27,000 to a seasonally adjusted 263,000 for the week ending September 6. Higher inflation complicates the Federal Reserve's plan to lower interest rates, while worsening job data could argue for cuts; a modest 25-basis-point reduction remains likely. Kroger reported Q2 EPS of $1.04, beating estimates, with sales of $33.9 billion slightly below expectations.
Read at 24/7 Wall St.
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