The consumer-price index was flat in September, the government said Thursday, marking the smallest change since January. Economists polled by MarketWatch had forecast a 0.1% advance.
The increase in the cost of living over the past 12 months was also unchanged at 1.7%.
The low rate of inflation, reflected in the CPI and other price barometers, may allow the Fed more leeway to trim rates if growth in the economy continues to slow. Wall Street puts a high chance the central bank will reduce rates again at the end of the month.
Another media narrative bites the dust. Looks like I was right yet again in predicting there would be no increase in inflation due to tariffs, bur rather that the tariffs would provide the fed justification to lower rates. Rather than being inflationary, paradoxically, the tariffs become deflationary by forcing bond yields lower. I was probably the only person, in 2018-2019, to make this observation.
Form Wolf Street:
The consumer price inflation data released today by the Bureau of Labor Statistics, which corroborates prior inflation data, says that, yes, prices are rising, but they’re rising sharply in services that are not impacted by imports and tariffs, such as rents and other housing costs, healthcare, education, and other services, and also in restaurants (where customers pay mostly for labor and rent). But inflation in durable goods, such as electronics, cars, and the like – where the tariffs would show up – was very low.
Josh Brown aka The Reformed Butthead still spreading this bogus inflation-will-hurt-consumer-spending narrative:
Josh here – worth pointing out that those Dec 15th new tariffs are going to hit some of the more visible stuff that consumers buy directly, like iPhones and clothing at the mall. Also, the timing couldn’t be worse, two weeks before Christmas.
Maybe he should look at the actual data as I have done instead of just spouting off nonsense. He’s a financial adviser, but do you want someone whose obvious anti-Trump bias has occluded his perspective on reality, to be managing your money?
Retail sales are booming. Target, Walmart, Disney, etc. posting blowout quarters years after year. There will no Christmas shopping slowdown due to tariffs, as so many in the useless financial media are predicting.