US Core CPI Expected to Rise With Persistent Inflation Concerns

U.S. Core CPI Expected to Rise With Persistent Inflation Concerns

The Bureau of Labor Statistics is set to roll out the next update of the United States Core Consumer Price Index today. Analysts predict 0.4%, up slightly from last month's 0.3%. This index measures a wide range of consumer goods and services, making it very important in tracking inflation.

This pickup in turn can suggest that inflationary pressures on consumption remain active and might continue to erode consumer buying power. The trend then may impress the Federal Reserve System to become wary or even change interest rates. Higher Core CPI readings may then squeeze monetary policies as the Fed looks for a middle way between growth and inflation control.

And if inflation continues, firms may hike prices to cover their costs, forcing customers to cut back on non-essentials. In such a situation, while it is all going to depend on the data that is yet to come out and its fallout on the economy for the sectors concerned, those sectors that have very direct competition with the customers for spare change would be most susceptible.

Australia Employment Report Update Due today

 As per the leading forecasts, the actual figure of employed Australians will come out today through the employment report by the Australian Bureau of Statistics. It is forecast that 60.0K, the figure might be slightly lower than the previous increase of 64.1K. 

If the numbers come out as such, it would portray that the labor market in Australia is seeing steady but moderated growth. This growth can reflect that the current economic conditions are sustaining continued job creation, thus potentially supporting market confidence. Such employment growth could prop up the Australian dollar since a stronger labor market typically is associated with currency appreciation.

However, any deviation from the consensus can change the market psychology. If the gain is short of forecasted, this could be interpreted as perhaps an indication that economic stress may come through soon enough to cap further dollar strength. Conversely, a number that is higher than expected will typically indicate resiliency and support the odds for upside currency moves as the market digests improved employment conditions.