Monday, October 2, 2023
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Inflation at 40-Yr Highs Shocks Americans, Spooks Washington…

by Paul Ebeling
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#inflation #CPI #Fed

“US inflation rose 6.8% in November, the fastest rate in 39 yrs, while the stock market marching higher even while the cost of living soars. ” — Paul Ebeling

…but not the stock market!

S&P 500 marks record close following hot CPI (inflation) data. As all 11 S&P 500 sectors closed higher, with the information technology sector (+2.1%) being the biggest and most influential gainer. The financials sector (+0.1%) underperformed on a relative basis with a 0.1% gainer.

The Labor Department’s Consumer Price Index (CPI) climbed by 6.8% in November compared to last yr, marking the fastest annual increase since June 1982. This rate matched consensus economists’ estimates, but accelerated compared to the 6.2% year-over-year rate from the previous month. 

Even excluding more volatile food and energy prices, the core CPI rose by 4.9% over last yr for the fastest increase in about 3-decades. 

The gasoline price index was up about 58% over last yr for its largest 12-month increase since Y 1980. 

Grocery stores prices also increased further during the month, with an index tracking food at home gaining 0.8% in November over October. Over the past 12 months, this index gained 6.4%, marking the fastest increase since December 2008.

The economy continues to grow at an above average pace too, so we are at an inflection point and the Fed will likely sit tight while lawmakers face heat from their constituents over the Christmas holiday.

Have a happy, healthy weekend, Keep the Faith!

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