Fed-friendly data, ‘last mile’ in focus

  • Falling gasoline prices will bring down headline inflation in November
  • Core inflation is expected to remain elevated at 4% year-on-year basis
  • Economists are debating whether inflation will prove to be more stubborn over the “last mile”
  • Some economists believe the worry of the last mile is overblown

Further declines in gasoline prices are expected to bring down headline inflation in November, while core inflation remains elevated at 4% year-on-year basis. Economists are debating whether inflation will prove to be more stubborn over the "last mile", but some believe the worry is overblown. Falling gasoline prices are seen as a positive factor for the Federal Reserve, as it may help ease consumer inflation. The government will release the CPI data on Tuesday, and economists expect headline inflation to remain unchanged in November, bringing it down to 3% from 3.2% in the prior month. Core inflation is forecasted to rise 0.3% in November, following a 0.2% gain in October. If economists’ forecasts are correct, core inflation over the past six months would be running at a 2.8% annual rate, the first time it has been below 3% since March of 2021. Economists will be closely watching core services excluding housing for clues on when overall core inflation will turn lower. Despite the debate, some economists believe that the worry of the last mile is overblown and that inflation will not be as difficult to control as anticipated.

Factuality Level: 7
Factuality Justification: The article provides information on economists’ expectations for inflation in November, based on a Wall Street Journal survey. It includes quotes from economists and their differing opinions on inflation. However, the article does not provide any data or analysis to support these opinions, and it does not provide a balanced view by including perspectives from economists who may have different views on inflation. Additionally, the article includes some unnecessary background information and details that are tangential to the main topic of inflation.
Noise Level: 3
Noise Justification: The article provides information on gasoline prices and inflation rates, but it lacks depth and analysis. It mostly consists of quotes from economists and their predictions, without providing much evidence or data to support their claims. The article also includes unrelated information about the 10-year Treasury yield, which is not directly related to the topic of inflation. Overall, the article lacks scientific rigor, intellectual honesty, and actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Gasoline prices
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the impact of declining gasoline prices on headline inflation, which is relevant to financial markets. However, there is no mention of any extreme events.
Public Companies: BMO Capital Markets (N/A)
Private Companies: Deutsch Bank,EY,SGH Macro Advisors,CIBC Capital Markets
Key People: Scott Anderson (Chief U.S. Economist at BMO Capital Markets), Gregory Daco (Chief Economist at EY), Tim Duy (Chief U.S. Economist at SGH Macro Advisors), Avery Shenfeld (Chief Economist at CIBC Capital Markets)

Reported publicly: www.marketwatch.com www.wsj.com