Inflation Data Favorable for the Dollar, Initial Jobless Claims Not So Much

Agencies comment on US inflation and employment data: US inflation was higher than expected in September, with headline inflation up 2.4% year-on-year and core inflation up 3.3% year-on-year, both of which were 0.1% higher than widely expected. Higher core inflation is the real disappointment, and will add to the belief that the Fed will gradually cut interest rates slightly, which is what many Fed officials have been talking about this week. The inflation data was favorable for the dollar, but the rise in jobless claims to 258,000 was not. We did write last week that the impact of Hurricane Helen and the port strike means that the next few initial jobless claims may not be the best way to monitor the health of the labor market.