Economic Data Overview - The Consumer Price Index (CPI) rose to 3.0% in September, slightly up from 2.9% in August but below the expected 3.1% [2] - Monthly price growth was 0.3%, a deceleration from the 0.4% increase in August and below the projected 0.4% [2] - Core inflation, excluding food and energy, cooled to 3.0% in September, down from 3.1% in August and below the expected 3.1% [2] Inflation Drivers - The primary contributor to the CPI increase in September was higher gas prices, while food, shelter, airline fares, recreation, household furnishings, and apparel also saw price increases [3] - Conversely, prices for motor vehicle insurance, used cars, and communication costs declined [3] Consumer Sentiment - The University of Michigan Consumer Sentiment Index fell nearly 3% to 53.6 in October, below the forecast of 55.0, marking the lowest level since May [5] - The decline in sentiment was attributed to ongoing inflation concerns, with younger consumers showing improved sentiment but older demographics experiencing noticeable drops [6] Housing Market Insights - Existing home sales rose 1.5% in September, reaching a seasonally adjusted annual rate of 4.06 million units, aligning with expectations [8] - The median price for existing homes decreased by 1.7% from August, marking the lowest level in five months, although it was up 2.1% year-over-year [9] Market Reactions - The S&P 500 index briefly crossed above 6,800 for the first time, finishing the week with a 1.9% gain [11] - The CME FedWatch Tool indicates a 97% likelihood of a 25 basis point rate cut by the Federal Reserve in the upcoming meeting [12] Upcoming Economic Outlook - The economic outlook remains complex due to the ongoing government shutdown, with private and regional reports expected to provide insights into economic activity [13] - Attention will be focused on the Federal Reserve meeting, which will influence market expectations, alongside housing market reports and manufacturing sector data [14]

Core Insights - Economists anticipate inflation to rise in the fourth quarter due to the impact of President Trump's tariffs on consumer prices [2][8] - The Consumer Price Index (CPI) is projected to increase by 3% year-over-year in the fourth quarter, up from 2.9% in August, marking the highest level since May 2024 [3][8] - Inflation, as measured by Personal Consumption Expenditures (PCE), is expected to reach 3.2% in December, a rise from 2.9% in August, with a forecasted decline starting in 2026 [4][9] Inflation Trends - The CPI is expected to accelerate in the fourth quarter as companies begin to pass on tariff-related costs to consumers [3][8] - The PCE index rose by 2.7% year-over-year in August, indicating a slight increase from 2.6% in July, while core PCE remained stable at 2.9% [4] - A significant portion of tariff costs, estimated at 70%, is being passed on to consumers, with expectations of further increases in the coming months [6][7] Consumer Impact - Rising inflation is affecting household budgets, particularly for essential goods like gas and groceries, with wage increases not being evenly distributed among Americans [5] - Companies have been hesitant to raise prices due to potential loss of business, but surveys indicate a shift towards passing on costs to consumers [6][7]

Economic Indicators - Consumer prices increased by 0.4% in August, which is double the increase from the previous month, resulting in an annual inflation rate of 2.9% [1] - The core consumer price index, excluding food and energy, rose by 0.3% in August, maintaining a 12-month figure of 3.1%, aligning with forecasts [2] Employment Data - Weekly unemployment compensation filings unexpectedly rose to a seasonally adjusted 263,000, surpassing the estimated 235,000, and increasing by 27,000 from the previous period [2]