Core Inflation Data - Inflation held steady at 3% in September, slightly below analysts' expectations of 3.1% [2][8] - The Consumer Price Index (CPI) rose 3% year over year in September, up from 2.9% in August, marking the highest reading since May [2][3] - Month-over-month prices increased by 0.3%, lower than August's 0.4% rise and below economists' expectations [3][4] Energy Prices Impact - Gasoline prices rose by 4.1% in September, contributing to the monthly price increase, but were down 0.5% year over year [3] - The broader energy commodities index decreased by 0.4% compared to the previous year [3] Core Inflation Insights - Core inflation, excluding food and energy, rose 3% year over year in September, down from 3.1% in August [4] - On a monthly basis, core prices increased by 0.2%, easing from a 0.3% gain in August [4] Economic Context - The report was the first major piece of federal economic data released since the ongoing government shutdown, which is now the second-longest in US history [5][6] - RSM chief economist noted the report as a "market positive story," but warned about potential data quality deterioration due to the shutdown [6][7] Future Outlook - The current inflation rate of 3% is expected to potentially accelerate, remaining above the Federal Reserve's target of 2% [8] - Markets anticipate a quarter-point cut from the Fed at the upcoming policy meeting, despite persistent inflation [8]

Core Insights - The consumer price index (CPI) increased by 0.3% in September, resulting in an annual inflation rate of 3%, which was lower than economists' expectations of 0.4% and 3.1% respectively [1] - Core CPI, excluding food and energy, showed a 0.2% monthly gain and maintained an annual rate of 3%, also below the anticipated 0.3% [2] - Gasoline prices surged by 4.1%, being the largest contributor to the inflation report, while overall commodity prices rose by 0.5% [2] Housing and Services - Shelter costs, which account for about one-third of the CPI weighting, increased by only 0.2% month-over-month and 3.6% year-over-year [3] - Services, excluding shelter costs, also saw a 0.2% increase [3] - New vehicle prices rose by 0.8%, while used car and truck prices decreased by 0.4% [3]

Economic Indicators - The U.S. Bureau of Labor Statistics has recalled some workers to prepare the September inflation data despite the ongoing government shutdown, which has raised doubts about the timing of its release originally scheduled for October 15 [3][4] - The inflation report may now be released in time for the Federal Reserve's monetary policy meeting on October 28-29, as the White House Office of Management and Budget has requested the BLS to expedite the process [4] Consumer Trends - Piper Sandler Companies released its 50th semi-annual "Taking Stock With Teens" survey, indicating that Nike remains the top clothing and footwear brand among teenagers, followed by Hollister and Adidas [9] - In the beauty category, e.l.f. Cosmetics continues to lead, while Sephora is the preferred beauty shopping destination for teens [10] - Teenage spending is significant, influencing both direct economic contributions and household purchasing decisions, with billions spent annually [11] Corporate Developments - Instagram's head, Adam Mosseri, has indicated that the company is exploring the development of a standalone TV app to enhance its video content offerings and compete with platforms like YouTube [12][13] - Mosseri believes that existing vertical video content on Instagram could be adapted for a TV format, suggesting a strategic pivot towards video consumption [14]

Core Inflation and Federal Reserve's Approach - Inflation remains a significant concern, with core PCE at 2.9% and core CPI at 3.1%, both above the Federal Reserve's 2% target [1][2] - The Federal Reserve primarily uses PCE data as its inflation gauge, emphasizing core inflation which excludes volatile food and energy prices [2][3] - In its latest meeting, the Fed cut the federal funds rate by 25 basis points to a range of 4.00%-4.25%, marking the first cut of the year, with expectations for two more cuts by year-end [3] Comparison of PCE and CPI - Core PCE is less volatile than core CPI, making it a more reliable indicator for the Fed's dual mandate of price stability and maximum employment [5] - Historical data shows that core CPI has consistently been more volatile than core PCE, with core CPI peaking at 6.63% in September 2022 compared to core PCE's peak of 5.57% in February 2022 [6][7] - Since 1960, core CPI has been higher than core PCE nearly 80% of the time, with an average difference of 48 basis points, which has narrowed to 21 basis points as of August 2025 [8] Long-term Trends in Inflation - Cumulative growth since 1960 shows core CPI has increased by 982%, while core PCE has grown by 701%, indicating a significant difference in inflationary growth rates [9] - The COVID-19 pandemic triggered the highest inflation rates since the early 1980s, leading to a stall in inflation above the Fed's target [7][10]

Core Viewpoint - The article discusses the economic impact of tax cuts and market optimism during Trump's presidency, as presented by economist Larry Kudlow, who attributes significant growth in GDP and business investment to these policies [1][2]. Group 1: Economic Growth Indicators - U.S. GDP grew by 3.8% in the second quarter of Trump's presidency, a notable recovery from a -0.6% decline in the previous quarter, which Kudlow interprets as evidence of the effectiveness of Trump's tax bill [1]. - Business investment saw an increase of 8.5%, which Kudlow attributes to the tax bill allowing immediate write-offs for new machinery and computers [2]. - There was a 16% rise in new business startups, a statistic sourced from the St. Louis Federal Reserve, indicating a surge in entrepreneurial activity [2]. Group 2: Stock Market Performance - The S&P 500 index increased by 32% and the Nasdaq by 46% since early April, which Kudlow uses as further evidence of economic confidence and investment [2]. Group 3: Critique of Claims - The tax bill was not signed until after the second quarter ended, suggesting that businesses could not have anticipated its effects when making spending decisions [4]. - Kudlow's reference to a GDP deflator of 2.1% as an indicator of inflation is challenged, as it does not reflect the actual cost of living experienced by consumers, who are more affected by the Consumer Price Index (CPI) or Personal Consumption Expenditures (PCE) [5].

Core Insights - The Consumer Price Index (CPI) may not accurately reflect the inflation experience of middle- and low-income Americans, as argued by former U.S. Comptroller Gene Ludwig [2][4] - Ludwig and the Ludwig Institute for Shared Economic Prosperity (LISEP) have proposed an alternative measure called the True Living Cost (TLC), which focuses on essential household needs and has increased 1.3 times faster than the CPI since 2001 [3] Economic Impact - The disconnect between inflation statistics and the real-life experiences of Americans was evident during the last presidential election, with rising grocery prices being a significant concern for voters [4] - The August 2025 Survey of Consumer Expectations from the New York Fed indicates that labor market volatility and tariff uncertainties are affecting consumer outlooks [5] Consumer Behavior - Recent research shows that nearly 25% of households struggle to manage monthly bills, and half have minimal savings to cope with rising costs [6] - Financial instability is not confined to low-income groups, as over one-third of adjustable-rate mortgage borrowers earning more than $100,000 report living paycheck to paycheck, highlighting a broader trend of financial fragility [7]

Market Overview - U.S. stocks experienced an upward trend, with the Nasdaq Composite gaining over 150 points on Thursday. The Dow increased by 1.32% to 46,089.25, the NASDAQ rose by 0.72% to 22,044.49, and the S&P 500 climbed by 0.80% to 6,584.57 [1] - Consumer discretionary shares saw a notable increase of 1.6% on Thursday, while communication services stocks fell by 0.2% [1][2] Company Earnings - Kroger Company reported second-quarter adjusted earnings per share of $1.04, surpassing the analyst consensus estimate of 99 cents. Quarterly sales reached $33.94 billion, slightly below the consensus of $34.102 billion [3] - Kroger raised its FY25 adjusted EPS outlook to a range of $4.70–$4.80, up from the previous range of $4.60–$4.80, compared to the analyst consensus of $4.77. Adjusted identical sales without fuel are expected to increase by 2.7%-3.4%, an improvement from the prior estimate of 2.25% – 3.25% [4] Stock Movements - MOGU Inc. shares surged by 110% to $5.24 after the company approved a strategic allocation of up to $20 million to digital currencies [10] - Opendoor Technologies Inc. saw its shares increase by 56% to $9.17 following the appointment of a new CEO and the return of co-founders to the board [10] - Vince Holding Corp. shares rose by 92% to $3.1908 after reporting better-than-expected quarterly results [10] - Conversely, Robin Energy Ltd. shares dropped by 41% to $1.3501 due to a $7.5 million public offering announcement [10] - Avidity Biosciences, Inc. shares fell by 19% to $37.42 after announcing a $500 million common stock offering [10] - The Lovesac Company experienced a decline of 14% to $17.89 after cutting FY2026 GAAP EPS guidance and narrowing its sales outlook [10] International Markets - European shares showed positive movement, with the eurozone's STOXX 600 rising by 0.47%, Spain's IBEX 35 Index increasing by 0.57%, and London's FTSE 100 up by 0.70% [8] - Asian markets closed mostly higher, with Japan's Nikkei 225 gaining 1.22%, China's Shanghai Composite rising by 1.65%, while Hong Kong's Hang Seng fell by 0.43% [11]

Market Overview - U.S. stocks experienced an upward trend, with the Nasdaq Composite increasing by over 150 points on Thursday. The Dow rose by 1.32% to 46,089.25, the NASDAQ increased by 0.72% to 22,044.49, and the S&P 500 gained 0.80% to 6,584.57 [1] - Consumer discretionary shares saw a notable increase of 1.6% on Thursday [1] Company Earnings - Kroger Company reported second-quarter adjusted earnings per share of $1.04, surpassing the analyst consensus estimate of 99 cents. Quarterly sales reached $33.94 billion, slightly below the consensus of $34.102 billion [3] - Kroger raised its FY25 adjusted EPS outlook to a range of $4.70–$4.80, up from the previous range of $4.60–$4.80, compared to the analyst consensus of $4.77. Adjusted identical sales without fuel are expected to rise between 2.7% and 3.4%, an increase from the prior view of 2.25% to 3.25% [4] Stock Movements - MOGU Inc. shares surged by 110% to $5.24 after the company approved a strategic allocation of up to $20 million to digital currencies [10] - Opendoor Technologies Inc. saw its shares increase by 56% to $9.17 following the appointment of a new CEO and the return of co-founders to the board [10] - Vince Holding Corp. shares rose by 92% to $3.1908 after reporting better-than-expected quarterly financial results [10] - Robin Energy Ltd. shares dropped by 41% to $1.3501 after announcing a public offering of shares [10] - Avidity Biosciences, Inc. shares fell by 19% to $37.42 following a $500 million common stock offering [10] - The Lovesac Company shares decreased by 14% to $17.89 after cutting FY2026 GAAP EPS guidance and narrowing its sales outlook [10] Commodity Market - In commodity news, oil prices fell by 1.8% to $62.54, while gold decreased by 0.4% to $3,668.70. Silver prices increased by 0.6% to $41.840, and copper rose by 0.4% to $4.6370 [7]

Core Insights - Inflation increased to 2.9% annually in August, up from 2.7% in July, aligning with economist expectations [1] - Month-over-month, prices rose by 0.4% in August, compared to a 0.2% increase in July, driven by higher gasoline and food prices [2] - Core inflation remained steady at 3.1% year-over-year, with a monthly increase of 0.3%, matching July's performance [2] Federal Reserve Implications - The Federal Reserve is considering its next interest rate move, with markets anticipating a quarter-point cut despite rising prices [3] - The likelihood of a larger half-point reduction has increased due to revisions indicating the US economy added 911,000 fewer jobs than previously reported [4] - Following the inflation report, traders are pricing in a 92% chance of a quarter-point cut and an 8% chance of a half-point cut by year-end [5] Wholesale Inflation Data - Producer prices fell by 0.1% in August, marking the first decline in four months, suggesting businesses are absorbing some tariff costs [6] - The lack of stronger price pressures indicates potential softening in domestic demand amid a weakening labor market [6]

Economic Indicators - Stock index futures are showing positive movement with S&P 500 futures up by 0.2%, Nasdaq 100 futures up by 0.2%, and Dow futures up by 0.1% as investors anticipate the retail inflation report [3] - The 10-year Treasury yield remains unchanged at 4.06%, while the 2-year yield is flat at 3.56% [4] - The Consumer Price Index (CPI) for August is expected to rise by 0.3% month-over-month, up from 0.2% in the previous month, with a year-over-year increase anticipated at 2.9%, compared to 2.7% in July [4] Gun Industry - Gun stocks have seen a rise following the shooting of conservative activist Charlie Kirk, with Smith & Wesson up 4.9% in premarket trading after a 6.7% increase on Wednesday [5][7] - American Outdoor Brands closed 5.3% higher and is slightly up in premarket, while Sturm, Ruger closed with a 3% gain and is up 7.4% postmarket [7] - The shooting incident is expected to drive demand for stricter gun control laws, historically leading to increased demand for firearms [6] Technology and Robotics - Ant Group has introduced its first humanoid robot, the R1 model, which can perform various tasks including serving as a tour guide and sorting medicine [8] - The R1 robot was demonstrated at the 2025 Inclusion Conference in Shanghai and is designed for end-to-end planning of complex assignments [8] Corporate Developments - Opendoor Technologies shares surged by 40% after the appointment of former Shopify COO Kaz Nejatian as CEO, with co-founders returning to the board [10] - Khosla Ventures and co-founder Eric Wu will invest $40 million in Opendoor through a private placement to support business growth [10]