❗️Delicate pricing environment...

✅PPI #inflation: 2.7% y/y (flat) in September
✅Down from 11.7% in Mar '22
🟠Upper-end of 2016-19 range

✅Core PPI 2.9% y/y (flat)
✅Down from 7.1% in Mar '22
🟠Higher than 2.5% in Nov '23 & rising

Key take-aways:

⛽️Energy was a key swing factor (60% from gasoline)

📈#Tariffs passthrough building via core goods

💡Business markups swinging wildly, last couple of months indicate a squeeze in margins for final demand trade services (margins for retailers & wholesalers)

👀Momentum in #retail sales remains robust, but it's been slowing for 6 months

✅#Retail sales +4.3% y/y in September
✅Core retail sales +4.1% y/y

Volumes trend is more subdued:
🟡Inflation-adjusted retail sales +1.2% y/y
🟡Inflation-adjusted core sales only +1.1% y/y

Ugly #Retail sales **volumes** show consumer struggling to push trough #tariffs

🔻Total -0.1%
🔻Core -0.4%

⚕️Health +0.6%
👩‍🍳Rest/bar 0.6%
🏠Build mat 0.5%
🛋️Furn 0.1%
🛒Groc -0.1%
🚗Auto -0.6%
💻Online -1.0%
🎮Elec -1.3%
👗Cloth -1.5%
🏬Merch -1.9%
⛽️Gas -2.1%
⚽️Sport -2.5%

Yes, it's reassuring to see no surge in layoffs despite record job cut announcements in October.

Still, labor demand is weak with hiring frozen, and only 2 sectors driving payroll gains.

If a policymaker is looking to neutralize policy, I would think they have a couple more cuts to go in 2026.

Yes, that's why I don't think it moves Fed Chair Powell away from the cautious and agnostic hold in December.

Without the December 16 data for October and November payrolls (and November unemployment), you're not making a data dependent decision.

While I agree that this would be optimal, I'm not sure the "many" policymakers who favored a December skip in the FOMC Minutes would want to adjust policy a week before the combo release of the October/November payrolls.

FOMC meeting Dec 10-11
BLS employment report release Dec 16