Bulletin Business Briefing

Published 7:24 pm Tuesday, November 14, 2023

U.S. inflation broadly slowed in October, which markets cheered as a strong indication that the Federal Reserve is done hiking interest rates.

The so-called core consumer price index, which excludes food and energy costs, increased 0.2% from September, according to government figures.

Despite some monthly bumps, inflation has settled substantially from a 40-year high reached last year. That’s led several Fed policymakers to signal that they may be done raising interest rates, but Chair Jerome Powell has repeatedly stressed the central bank could hike again if needed.

The Bureau of Labor Statistics figures reflected increases in rent and personal-care products and services, as well as health insurance due to a methodological change in how the government calculates it. Meanwhile, airfares and used-car prices declined.

Still household budgets are strained in many ways. Grocery prices rose by the most since July, reflecting higher costs for basics like meat, milk and bread. Motor-vehicle insurance also rose.

Americans’ wages, when adjusted for inflation, rose for the first time in three months in October.

Wall Street surged after a report on U.S. inflation sent waves of relief through markets.

The S&P 500 jumped 1.9% to a two-month high Tuesday, one of is best days of the year. The Dow rallied 489 points, and the Nasdaq composite soared 2.4%.

The highly anticipated report showed inflation slowed last month, bolstering bets among traders that the Federal Reserve is finally done with its market-crunching hikes to interest rates.

Technology and other high-growth stocks led the way higher. Stocks of smaller companies also got a particularly big boost on hopes that financial conditions won’t tighten further.

Treasury yields tumbled.

Home Depot is continuing to see its sales decline amid inflation concerns, and the home improvement retailer narrowed its fiscal 2023 outlook.

But its quarterly performance came in above Wall Street’s expectations. Home Depot Inc. said Tuesday that its third-quarter revenue fell 3% to $37.71 billion.

Still, it managed to beat the $37.52 billion that analysts surveyed by Zacks Investment Research predicted. Inflation is hitting Home Depot on a number of fronts.

Americans are more closely watching where they spend money as costs rise.

It is also getting more expensive to put big-ticket items on credit cards or to take out a loan to buy them, a result of the fight by the U.S. Federal Reserve against inflation.