September CPI, job gains pressure Fed to remain hawkish
September’s rising inflation and solid job gains will keep pressure on the Federal Reserve to maintain its course, with additional increases in the target federal funds rate.
The Consumer Price Index rose 0.4 percent in September, according to the Bureau of Labor Statistics, and was up 8.2 percent year-over-year. In addition, the U.S. economy added 263,000 jobs in September, according to the BLS, and the unemployment rate edged down to 3.5 percent.
“This data supports Fed officials’ comments the last few days reiterating they will continue to fight inflation with more rate rises to come,” comments William Marsters, senior sales trader at Saxo UK, who noted that the dollar strengthened on the strong employment report, which is expected to keep pressure on the Federal Reserve to maintain a hawkish outlook.
By employment category, the strongest gains were in leisure and hospitality, which added 83,000 jobs, and healthcare, which added 60,000 jobs. In additi