Stocks rally to start the week as investors await CPI report

[mahatmakanejeeves]

Yahoo Finance

Stock market news live updates: Stocks rally to start the week as investors await CPI report

Alexandra Semenova · Reporter
Mon, September 12, 2022 at 4:04 PM

U.S. stocks kicked the week off higher Monday as Wall Street inched closer to highly-anticipated inflation data this week. ... All eyes are on the August Consumer Price Index (CPI) due out before markets open on Tuesday.

Economists surveyed by Bloomberg expected headline CPI rose 8.1% over the prior year in August, a moderation from an 8.5% increase seen in July. On a month-over-month basis, CPI is expected to show prices fell 0.1% from July to August, primarily due to continued easing in energy prices. If realized, this would mark the first monthly decline since May 2020.

Core CPI, which strips out the volatile food and energy components of the report and is closely tracked by the Fed, is likely to have inched higher in August, rising 6.1% over the same month last year, more than the 5.9% year-on-year increase seen in July.

The reading will likely affirm to investors whether the Federal Reserve raises interest rates by 0.50% or 0.75% at its policy meeting later this month. ... In recent weeks, Fed policymakers have doubled down on the U.S. central bank's commitment to proceeding with restrictive monetary policy for as long as necessary to restore price stability.

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[progree]

1. Core CPI: Predicted: August over July: +0.3%, same as July over June - per MarketWatch

https://www.marketwatch.com/economy-politics/calendar

The median forecasts in this calendar come from surveys of economists conducted by Dow Jones Newswires and The Wall Street Journal.

Core CPI is the CPI without food and energy, which are the more volatile components. So that's not bad, a 3.6% annualized rate for 2 months in a row, if August turns out to be +0.3% m/m.

As for food, that was still running hot in July: +1.3% over June, and +11.9% over July 2021.

[peppertree]

2. "Feed me, Seymour!" - "Oh, wait..."

"They've got a sale on beef tomorrow; you can wait 'til then."

[mahatmakanejeeves]

3. The WaPo is anticipating the report too.

Inflation likely slowed again in August, but policymakers see a long way to go

A government report is expected to reflect falling prices for gas, food and used cars, but it could be a long time before they fall back to pre-pandemic levels for families and businesses.

By Rachel Siegel • 1 hour ago

https://twitter.com/rachsieg

[progree]

4. August report - Table of the pieces:

https://www.bls.gov/news.release/cpi.nr0.htm
1 mo   12 months   Item
+0.6%   +6.3%     Core CPI: Everything* except food and energy
+0.8%   +11.4%   Food
-5.0%,   +23.8%   Energy
----------------------------------------
+0.1%   +8.3%     CPI: Everything*


*Everything is almost everything except house prices. It does include rent and owners' equivalent rent (they ask homeowners how much they think they could rent their houses for). They consider buying a house an investment rather than a consumption item -- an increase in housing prices help owners and hurt buyers.

Edit: I had August energy at -0.5%. I corrected it to -5.0%.