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Wholesale goods prices saw a slight increase of just 0.1% recently, as energy and food prices declined, offsetting some gains. Energy prices fell by 0.3%, while food prices dropped by 0.2%, largely influenced by reductions in liquefied petroleum gas and prices for chicken eggs and processed poultry. However, there were notable increases in prices for carbon steel scrap, meats, vegetables, and diesel fuel, indicating mixed price trends within the commodities sector.
On the other hand, unemployment data trends show a slight decline in unemployment claims, pointing to resilient employment conditions. Initial claims for unemployment insurance dropped to 217,000, with the four-week moving average suggesting a stable labor market. Although the insured unemployment rate remained unchanged, there was a slight decrease in weekly claims, hinting at a moderate softening in labor market momentum.
Looking ahead, the moderate wholesale price growth in October and stable labor market conditions may lead the Federal Reserve to remain cautious on further rate adjustments. Despite some inflationary pressures within core PPI components, overall inflation rates are manageable. This stable economic backdrop reinforces expectations for a rate cut in December, supporting borrowing conditions and investment activities.
In terms of market outlook, the economic forecast appears cautiously bullish, supported by low unemployment and contained inflation. Monitoring service and commodity prices will be crucial to anticipate any potential inflationary pressures in early 2025.
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