Right, so CPI is the new NFP. I mean, basically. Nobody cares about NFP anymore. Especially not in the near-term as divining anything from the headline print is impossible due to hurricane distortions. That’s why the only thing that mattered in the September report was the AHE number.
“It has become almost a cliche that ‘Friday’s CPI data is a key for the market’ [and] it’s not hard to see why –the labor market has ticked most of the boxes for fulfilling the Fed’s mandate, whereas inflation has remained stubbornly below the central bank’s self-defined target,” Bloomberg’s Cameron Crise wrote earlier this week, adding that “given the state of the Fed policy debate, it seems clear that inflation is the new payrolls — the single most important datapoint of the month.” He goes on to offer some counterpoints to that notion, but you get the idea.
Of course really, this whole thing is a crapshoot. The Fed is more “S&P-dependent” than they are “data-dependent” which means that ironically, the only reason the market cares about the data is because the market knows that the Fed cares about how the market interprets the numbers. It’s absurdly self-referential. No one is really sure who’s ultimately driving this clown mobile anymore. Is it the Fed? Is the data? Is the markets? Who knows. It seems like everyone has their hands on the wheel at once.
All we know is that to the extent the numbers matter, the inflation data is more important right now than the jobs dat.
So that brings us to this week’s econ “main event.” Here are the estimates and priors:
Here are the numbers, just out:
