Introduction
Despite the ongoing US federal government shutdown, the Bureau of Labor Statistics (BLS) last week released the monthly inflation figures for September, crucial for adjusting pensions to rising living costs. However, the employment data for September has yet to be disclosed.
Inflation Update
The Consumer Price Index (CPI) increased slightly in September, by 3% compared to the previous year, up from 2.9% in August. This increase, moving away from the 2% target, is still viewed favorably for the anticipated interest rate cut at the end of the central bank’s meeting, which begins today in Washington. Moreover, this modest rise in consumer prices suggests that tariffs imposed by the White House have not yet created significant inflationary pressures.
- September’s modest CPI increase of 3% indicates a favorable inflation environment, supporting expectations for an interest rate cut.
- Tariffs imposed by the White House have not yet resulted in substantial inflationary pressures, according to the recent CPI data.
- Some tariff-sensitive products, such as furniture, clothing, and sports goods, experienced price hikes above the average in September.
Market Volatility and Employment Data Uncertainty
Investors have shown a flight to safety, as evidenced by the gold price surge above $4,000, which retreated this week. Stock market volatility has also returned after six months of record-breaking gains, fueled by the AI boom. Some analysts consider these gains indicative of a potential bubble.
Due to the government shutdown, employment data remains unavailable. Nevertheless, private sources have reported a continued slowdown in the labor market, primarily caused by crackdowns on foreign workers.
About the Author
The author is an international analyst and consultant, former director of the CEPAL office in Washington. He is an economy and finance commentator for CNN en Español TV and radio, TELEMUNDO, UNIVISION, and other media outlets.
Key Questions and Answers
- Q: What is the current inflation situation in the US? A: The Consumer Price Index increased by 3% in September compared to the previous year, moving away from the 2% target but still considered favorable for an anticipated interest rate cut.
- Q: How have tariffs affected inflation? A: Despite some tariff-sensitive products experiencing price hikes above the average, the recent CPI data suggests that tariffs imposed by the White House have not yet created significant inflationary pressures.
- Q: What is the current state of the US labor market? A: Due to the government shutdown, employment data is unavailable. However, private sources report a continued slowdown in the labor market, primarily caused by crackdowns on foreign workers.
