US Consumer Prices Rise 0.5% In September, Slightly Less Than Expected
Oct 13 2017 by Johnny Bowman
The pan-European FTSEurofirst 300 index rose 0.01 percent and MSCI's gauge of stocks across the globe gained 0.12 percent. The energy index rose 10.1% in the last twelve months.
The Consumer Price Index grew 0.5% in September on a seasonally adjusted basis, according to U.S. Bureau of Labor Statistics.
Scott Clemons, chief investment strategist for Brown Brothers Harriman in NY, said that "after a long stretch of consecutive highs in the market, with earnings, even if they are slightly disappointing" that is an excuse to sell off. "It's largely corrective as the market awaits fresh signals".
The 30-year bond was last up 15/32 in price to yield 2.8562 percent, from 2.876 percent late on Wednesday.
Excluding food and energy prices, core producer prices still rose by 0.4 percent in September after inching up by 0.1 percent in August.
Stock indexes were broadly higher, with the Dow rising 0.2% and the S&P 500 up 0.1%.
"People got a little bit spoiled by the very nice advances we saw in the first and second quarter, but keep in mind that earnings started perking up in the third quarter of last year so the year-over-year comparisons might not look as robust", said John Carey, portfolio manager at Pioneer Investment Management in Boston.
Let's not forget inflation remains troublingly low, so the Fed will likely need to see improvement on that front to justify a move in December.
Compared to a year earlier, US CPI accelerated to 2.2% from 1.9% a month earlier but again shy of the 2.3% consensus estimate. The yield on the 10-year note quickly fell to 2.28% from 2.33% just before the report.
The dollar turned negative as sterling jumped to an eight-day high against the dollar with analysts citing a report in Germany's Handelsblatt newspaper that the European Union could offer Britain a two-year transitional Brexit deal.
The euro was up by 0.3% at 1.1868 against the dollar. The British pound was up by 0.4% at 1.3314 against the dollar. The groups "Recreation and culture" and "Restaurants and hotels" had the biggest downward impact on the total HICP that measures the change in prices of goods and services, consumed by all households (including foreign households) on the economic territory of the country.