US September CPI Data May Pose Upside Risks, Core CPI in Focus

According to PANews, the upcoming release of the U.S. September Consumer Price Index (CPI) data next Thursday may present some upside risks, particularly concerning the core CPI. The preliminary S&P Global Purchasing Managers' Index indicates that business purchase prices have risen at the fastest pace in six months. Although the ISM manufacturing survey showed a decline, the non-manufacturing report confirmed the acceleration of price pressures. Consequently, if the data reveals persistent inflation, more investors might believe that the Federal Reserve will proceed with its plan to cut interest rates by 25 basis points in both November and December decisions. Jim Baird, Chief Investment Officer at Plante Moran Financial Advisors, stated, 'Following a series of relatively weak employment data over the summer, the September employment report is exactly what the Federal Reserve wanted. It breaks the recent trend and provides an optimistic reason for the labor market to remain resilient.' He added that while the report will not alter the economic outlook, it should alleviate any concerns investors or the Federal Reserve might have about the job market. Earlier this week, Federal Reserve Chairman Jerome Powell expressed that he does not wish to see further weakening in the labor market. One of the main reasons the Federal Reserve decided to cut interest rates by 50 basis points last month was the slowdown in hiring and the rise in unemployment earlier this year.