The current 2.2% spread between the two series is the largest since September 2009. Meanwhile, the core CPI rose 6.6% in September from a year earlier, matching its cyclical high set in the previous month. The growth rate of the series has slowed from a 4.9% rate experienced from March 2022 to May 2022.
The rate of unemployment is barely below its average for this century But the unemployment rate remains historically low, and it's hard to see anything like the kind of clear weakening trend that the Fed must want: In theory, last Friday's non-farm payroll report for October should have brought the central bankers a little closer to easing, because the unemployment rate rose. This may be bad news for American workers, but good news for investors hoping the Fed will ease its monetary tightening given its "singular focus on destroying labor demand and fear of wage inflation," said Bryce Doty, senior vice president at Sit Investment Associates. Will they give the Federal Reserve any reason to relent? The big moment for financial markets, however, will unambiguously be Thursday's release of US CPI data for October. In the US, the week ahead will be punctuated by widespread school closures on Tuesday for midterm elections, by what could well be another drawn-out vote-counting process, and by Veterans Day (Armistice Day in the UK) on Friday.
US midterm elections aren’t the only thing happening this week.Photographer: Michael M.
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