Inflation weighs on yields, dollar; stocks lackluster (T, JPM, C)

Inflation weighs on yields, dollar; stocks lackluster (T, JPM, C)

It's a good look at the core of the consumer and is forecast to rise 0.4% after a 0.2% decline in August.

Oil prices rebounded from earlier losses, although they were still down on the session, after the U.S. Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production.

While investors cheered an increase in the US producer price index (PPI) for last month announced Thursday, inflation concerns were still in focus ahead of consumer price index (CPI) data on Friday after Federal Reserve minutes showed a more guarded view.

Gasoline prices spiked by 13.1 percent due to Hurricane Harvey and accounted for about three-fourths of the increase by the headline consumer price index.

The harmonized index of consumer prices, or HICP, also rose 1.8 percent year-on-year in September, same as in the previous month. Core prices had been expected to rise by another 0.2%.

On the year, core CPI increased 1.7% for the fifth consecutive month, missing the 1.8% consensus forecast.


The Dow Jones Industrial Average fell 31.88 points, or 0.14 percent, to end at 22,841.01, the S&P 500 lost 4.31 points, or 0.17 percent, to 2,550.93 and the Nasdaq Composite dropped 12.04 points, or 0.18 percent, to 6,591.51.

After four straight days of declines, the dollar index, tracking the greenback against a basket of major currencies, rose 0.02 percent.

On Thursday, the Labor Department released a separate report showing producer prices increased in line with economist estimates in the month of September. The index rose 1.7% for the 12 months ending in September.

On a year-over-year basis, it rose by 2.2%, which was above the prior month's reading of 1.9%, but below expectations of 2.3%.

"I$3 t's worth noting that the CPI number is not the Fed's preferred measure of inflation but it is released a couple of weeks before the core PCE price index and there is followed closely for signs of price pressures building or declining", Craig Erlam, senior market analyst at OANDA, said in emailed commentary.

The inflation rate since the beginning of the year (September 2017 compared to December 2016) has been 0.7% and the annual inflation in September 2017 compared to September 2016 was 1.3%.

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