Evelyn Reynolds

The producer price index was flat for the month and up 1.8% from a year ago. Economists surveyed by Dow Jones had been looking for a monthly gain of 0.1%.
Excluding food and energy, the PPI rose 0.2%, meeting expectations.
A 0.2% decline in final demand goods prices offset a 0.2% increase in services.

A measure of wholesale prices showed no change in September, pointing to a continued easing in inflation, the Labor Department reported Friday.
The producer price index, which measures what producers get for their goods and services, was flat for the month and up 1.8% from a year ago. Economists surveyed by Dow Jones had been looking for a monthly gain of 0.1% after August’s increase of 0.2%.

Excluding food and energy, the PPI rose 0.2%, meeting expectations.
The report comes a day after the Labor Department reported that the consumer price index, a more widely followed inflation measure that shows what consumers actually pay for goods and services, had an increase of 0.2% for the month and 2.4% from a year ago.
Markets showed little reaction to the data, with stock market futures pointing slightly higher on Wall Street while Treasury yields rose on longer-duration securities.
Together, the releases indicate that inflation is off its blistering pace that peaked more than two years ago but still mostly holds above the Federal Reserve’s 2% target.
Within the PPI, a 0.2% decline in final demand goods prices offset a 0.2% increase in services. Excluding trade services from core PPI, the index increased 0.1%.

A 3% jump in deposit services costs pushed the services index higher, while professional and commercial equipment wholesaling prices tumbled 6.3%.
On the goods side, a 2.7% slide in final demand in energy was the main factor in the decrease. Similarly, the index for gasoline fell 5.6%, holding back gains on the goods index. Diesel fuel prices plunged 17.6%.
Fed officials in recent days have expressed confidence that inflation is heading back to target even though some aspects, such as shelter, food and vehicle costs, have held stubbornly higher. Minutes from the September central bank meeting indicated policymakers were divided over the decision to slash the Fed’s benchmark interest rate by half a percentage point.
Most officials say they expect to continue to cut as long as the data indicates. Markets anticipate the Fed to lower by a quarter percentage point at each of its two remaining meetings this year.

Don’t miss these insights from CNBC PRO More

The U.K. economy returned to growth in August following two consecutive months of stagnation, providing a slight boost for the Labour government.
The U.K. economy grew 0.2% in August on a month-on-month basis, flash figures published by the Office for National Statistics showed Friday.
The reading comes as Finance Minister Rachel Reeves is set to deliver her Autumn Budget at the end of this month.

Alexander Spatari | Moment | Getty Images

LONDON — The U.K. economy returned to growth in August following two consecutive months of stagnation, providing a slight boost as the Labour government prepares to deliver its first budget later this month.
The economy grew 0.2% on a month-on-month basis, flash figures published by the Office for National Statistics showed Friday, meeting expectations of economists polled by Reuters.

It follows an economic flatlining in June and July after the U.K. recorded modest but steady expansion in almost every month this year. Britain emerged from a shallow recession at the start of the year.
Over the three months to August, Britain’s economic growth also expanded 0.2%, compared with the 0.5% recorded in the three months to July.
“The UK economy had a remarkable run through the first few months of 2024, at least if the monthly GDP figures are to be believed. But those same figures now show that this strength was short-lived,” ING’s Developed Markets Economist James Smith said in a note shortly after the release.
“The bottom line is that the economy still seems to be growing at a reasonable pace, but the 0.6/0.7% quarterly GDP readings we became accustomed to in the first two quarters of the year are not going to be repeated in the second half of the year. We’re looking for 0.2% growth in the third quarter overall.”
Sterling rose slightly against the U.S. dollar following the release, trading up 0.05% at $1.3067 by 8:56 a.m. London time. U.K. government bond yields, meanwhile, ticked lower, with the 10-year trading around 4.211%, having climbed sharply over recent days.

The U.K.’s dominant services sector showed slight growth of 0.1% in the month to August, while production and construction output rose by 0.5% and 0.4%, respectively.
Finance Minister Rachel Reeves welcomed the data, saying returning the economy to growth is the government’s “number one priority.”
“While change will not happen overnight, we are not wasting any time on delivering on the promise of change,” she said in a statement. The new Labour administration was voted into power in July during snap elections.

All eyes on the budget

The reading comes as Reeves is set to deliver her Autumn Budget at the end of this month, with tax hikes and spending cuts expected as she tries to overcome an estimated £22 billion ($29 billion) black hole in the public finances. The Conservative opposition party, which led the country until snap elections earlier this year, deny the gap.
ING’s Smith said that if the U.K. Treasury was hoping the strong growth in the first half of the year would unlock some “extra fiscal headroom” in the budget, “it is likely to be left disappointed.”
“Remember the key here is what the Office for Budget Responsibility projects for the UK economy. And like the BoE, they are unlikely to take much inference from the GDP figures so far this year. Indeed, if anything the OBR forecasts already sit at the more optimistic end of the spectrum,” he added.
The government is pitching its vision for an era of “national renewal,” as it attempts to inject some optimism into the public psyche after painting a gloomy picture of the state of the economy.
Lindsay James, investment strategist at Quilter Investors, said Reeves faces a “tricky balancing” to ensure her decisions don’t stifle further economic growth.
“With interest rates beginning to fall, the responsibility has shifted from the Bank of England to Rachel Reeves, who must now make critical fiscal decisions. She and the Prime Minister have indicated that ‘pain’ is necessary for future prosperity, but there is a real risk of overcorrection at the expense of economic growth,” she said. More

Eggs are displayed at a grocery store on September 25, 2024 in Greenbrae, California. 
Justin Sullivan | Getty Images

The pace of price increases over the past year took was higher than forecast in September while jobless claims posted an unexpected jump, the Labor Department reported Thursday.
The consumer price index, a broad gauge measuring the costs of goods and services across the U.S. economy, increased a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 2.4%. Both readings were 0.1 percentage point above the Dow Jones consensus.

The annual inflation rate was 0.1 percentage point lower than August and is the lowest since February 2021.
Excluding food and energy, core prices increased 0.3% on the month, putting the annual rate at 3.3%. Both core readings also were 0.1 percentage point above forecast.

Much of the inflation increase — more than three-quarter of the move higher — came from a 0.4% jump in food prices and a 0.2% gain in shelter costs, the Bureau of Labor Statistics said in the release. That offset a 1.9% fall in energy prices.
Other items contributing to the gain included a 0.3% increase in used vehicle costs and a 0.2% rise in new vehicles. Medical care services were up 0.7% and apparel prices surged 1.1%.
Stock market futures moved lower following the report while Treasury yields were mixed.

The release comes as the Federal Reserve has begun to lower benchmark interest rates. After a half percentage point reduction in September, the central bank is expected to continue cutting, though the pace and degree remain in question.

Fed officials have become more confident that inflation is easing back towards their 2% goal while expressing some concern over the state of the labor market.
While the CPI is not the Fed’s official inflation barometer, it is part of the dashboard central bank policymakers use when making decisions. Though the inflation reading was higher than expected, traders in futures markets increased their bets that the Fed would lower rates by another quarter percentage point at their Nov. 6-7 policy meeting, to about 86%, according to the CME Group’s FedWatch gauge.
In recent days, policymakers have said they see rising risks in the labor market, and another data point Thursday helped buttress that point.
Initial filings for unemployment benefits took an unexpected turn higher, hitting 258,000 for the week ending Oct. 5. That was the highest total since Aug. 5, 2023, a gain of 33,000 from the previous week and well above the forecast for 230,000.
Continuing claims, which run a week behind, rose to 1.861 million, an increase of 42,000.
On the inflation side, rising prices across a variety of food categories showed that inflation is proving sticky.
Egg prices leaped 8.4% higher, putting the 12-month unadjusted gain at 39.6%. Butter was up 2.8% on the month and 7.8% from a year ago.
However, shelter costs, which have held higher than Fed officials anticipated this year, were up 4.9% year-over-year, a step down that could indicate an easing of broader price pressures ahead. The category makes up more than one-third of the total weighting in calculating the CPI. More