Tuesday, November 12, 2024
Year : 2, Issue: 11
ABC News: After a week that saw the Republican Party set to take over Washington in the new year and the stock market enjoying a celebratory rally, economic focus will once again turn to its favorite subject of the past three years: inflation.
Twin reports on consumer inflation due out this week will either affirm the trendline of declining inflation or provide a reason for worry. On Wednesday, the Labor Department will report consumer price inflation for October with the expectation it will be unchanged from a month earlier though the annual rate is likely to move up a little from the 2.4% pace seen in September.
Likewise, a similar report on wholesale inflation Thursday is expected to show that the producer price index moved up slightly to a 0.2% increase after remaining flat in September. The annual rate is forecast to be 2.3%, up from 1.8% a month earlier.
While both readings are within the range that is consistent with a slowing of inflation closer to the Federal Reserve’s 2% annual target, there are concerns in the financial markets that President-elect Donald Trump’s economic plans could be inflationary. These include removing millions of immigrants from the country (and thereby the labor market), extending tax cuts that expire late next year and sharply increasing tariffs on imported goods that usually bring higher prices for consumers. “Important leading indicators of inflation continue to decline although there are some that have now turned higher,” said economist and long-time Fed watcher Hugh Johnson. “It’s about an even split here but we need to watch these carefully. They may be signaling a turn higher in inflation in the second half of 2025. Too early to tell yet.”
