Macro Briefing: 11 October 2024

US consumer inflation’s one-year trend slowed again in September, but the core rate rose. The mixed data suggests that disinflation may slow or pause in the months ahead. “September’s CPI report has good news and bad news for the Fed,” Eugenio Aleman, Raymond James’ chief economist, wrote in a note. Citing the softer housing component in the inflation report, which slowed to its lowest annual rate since February 2022, he advises: “The good news is that shelter costs slowed down to 0.2%, month-on-month, and 4.9%, year-over-year. However, it also showed that there are still plenty of upside risks for inflation going forward.” The “shelter” category accounts for more than one-third of the overall CPI.

US energy demand could exceed supply in the next several years, according to a report by Bain, a consulting firm. “US utilities are bracing for demand to outstrip supply during the next few years, with data centers accounting for the bulk of the increase could outstrip supply within the next few years,” the firm writes.
US jobless claims rose sharply last week, rising to 258,000–the highest in over a year. The spike appears related to temporary effects from Hurricane Helene and a Boeing strike rather than a sudden change in business-cycle risk, analysts advise. “Claims will likely continue to be elevated in states affected by Helene and Hurricane Milton as well as the Boeing strike until it is resolved,” says Nancy Vanden Houten, lead U.S. economist of Oxford Economics. “We think, though, that the Fed will view these impacts as temporary and still expect it to lower rates by (25 basis points) at the November meeting.”