Consumer Inflation Report May Disappoint Fed; With Interest Rates Above 9%, Small Businesses Pull Back; Holiday Hiring Demand Slides By James Christie

Good day. Economists surveyed by The Wall Street Journal estimate the U.S. Labor Department's October consumer-price index report coming out today will show prices rose 0.1% last month from September and 3.3% from a year earlier. They also think core prices, which exclude volatile food and energy items, rose 0.3% in October from the prior month and 4.1% from a year earlier. Such readings probably won't be of much comfort to Federal Reserve officials, who are looking for evidence that inflation continues to cool, according to some analysts. Meanwhile, with borrowing costs double their levels from just two years ago, many small businesses are pulling back, another sign of how higher interest rates are cooling the economy. And the number of seasonal positions publicly advertised this fall slid to the lowest level in a decade, which could be a warning of a weakening labor market.

Now on to today's news and analysis.

Top News What to Watch in the CPI Report: Did Inflation Heat Up or Cool Down?

Americans paid less for gasoline last month, helping keep inflation in check, but underlying price pressures remained steady in October, analysts estimate. Such an outcome would leave inflation elevated and reflect why the Federal Reserve isn't declaring an end to its historic campaign of interest-rate increases.

Economists surveyed by The Wall Street Journal estimate consumer prices rose 0.1% in October from the prior month and 3.3% from a year earlier. That would represent a slowdown from September's 0.4% monthly rise and 3.7% yearly increase. The Labor Department will release the October consumer-price index report at 8.30 a.m. Eastern time today.

Wall Street Is Bracing for Inflation Data That Includes Problematic Undertones for the Fed (MarketWatch) Americans Don't Expect Big Drops in Inflation Rate Anytime Soon (MarketWatch) Economists Embrace Notion of 'No Landing' for Economy in 2024

Ever since the pandemic started to lose its grip on the economy in 2022, fears of a recession have waxed and waned . Most of 2023 was spent awaiting the downturn. And with less than two more months left in this calendar yet, these concerns have naturally shifted to 2024. But gradually, a new outlook has emerged that asks "why must there be a landing at all?" This view is the consensus forecast of 34 economists surveyed by the Philadelphia Fed and released Monday. "The outlook for the U.S. economy looks somewhat better now than it did three months ago," the survey found. (MarketWatch)

Glynn's Take: Chalmers May Lean Toward Naming Outsider to RBA Deputy's Post By James Glynn

SYDNEY-The question of how far the Reserve Bank of Australia is willing to go to remove groupthink from its ranks will be answered in the coming weeks as Treasurer Jim Chalmers moves to appoint a new deputy governor.

Central to that debate is whether he promotes an official already at the RBA or opts for an outsider. Market chatter about potential candidates includes Chris Kent, the current assistant governor overseeing the operation of financial markets, and Justin Wolfers, an economist and academic who teaches at the University of Michigan. Read more .

U.S. Economy With Interest Rates Above 9%, Small Businesses Slam the Brakes

Some entrepreneurs are postponing equipment purchases and expansion plans, while others are delaying hiring, rethinking loan terms or stepping up efforts to collect payments on time to cope with steeper borrowing costs .

Holiday Hiring Demand Drops Off, a Warning for the Job Market

Businesses need fewer extra workers for holiday jobs this fall after fighting in recent years to find enough staff to stock shelves, fill boxes and deliver packages during the year-end rush, a potential warning of a weakening labor market.

Hyundai Motor America to Raise Alabama, Georgia Employees' Wages Stellantis Prepares to Offer Buyouts to U.S. Salaried Workers

Climate Change's $150 Billion Hit to the U.S. Economy

The U.S. now experiences an extreme weather event in which damages and costs top $1 billion every three weeks . That compares with every four months in the 1980s, when adjusted for inflation, the latest NCA installment shows.

U.S. Shift on Global Tech Rules Jeopardizes Effort to Counter China

The Biden administration's abrupt shift on global technology rules for facilitating digital trade has weakened a critical Asia trade agreement that was intended to help counter China's growing clout in the region.

Key Developments Around the World Why Xi Can No Longer Brag About the Chinese Economy

Two years ago, Beijing was ascendant. Now, as Biden and Xi prepare to meet at the Asia Pacific summit, U.S. growth is humming while China struggles with a property slump and local government debts.

China's Economy Is Sending Mixed Signals. What to Watch . (MarketWatch) Can Lower Gas Prices Last?

A selloff that dragged crude prices near their lowest levels in four months has left many oil drillers, energy traders and fuel producers asking what will the Saudi-led Organization of the Petroleum Exporting Countries do?

Big Oil Producer Lines Up African Carbon Deals Ahead of Climate Talks Unemployment Was One Problem Europe Didn't Have. No Longer.

Europe's labor markets are starting to crack. After a year of near-zero economic growth, job creation is slowing and surveys suggest more businesses in the region are preparing to lay off workers, threatening to further damp growth .

Financial Regulation Roundup FDIC Hires Firm to Assess Alleged Harassment and Discrimination

The Federal Deposit Insurance Corp. has hired an independent firm for a "top-to-bottom assessment" of alleged harassment and discrimination, after The Wall Street Journal found a toxic atmosphere at the regulator.

FTX Sues Bybit to Recover $953 Million in Cash and Assets

Bankrupt cryptocurrency exchange FTX has filed a lawsuit against Bybit Fintech and two affiliates to try to claw back assets valued at $953 million that were withdrawn shortly before FTX's November 2022 collapse.

The Upending of One of America's Most Popular Professions

A court verdict last month stands to radically alter the way real-estate agents are paid for their work, and could result in far lower pay for the 1.6 million men and women who sell homes as their main job or as a side hustle.

Forward Guidance Tuesday (all times ET)

8:30 a.m.: U.S. consumer-price index for October

Wednesday

2 a.m.: U.K. consumer-price and producer-price indexes for October

5 a.m.: EU industrial production for September

8:30 a.m.: U.S. producer-price index for October; U.S. retail sales for October

3:30 p.m.: Richmond Fed's Barkin speaks at Virginia governor's Housing Conference

Research UK Wage Growth Still Uncomfortable for Bank of England

The pace of wage growth eased back slightly in the three months to September, but it's still historically high and will make for uncomfortable reading by Bank of England policymakers when they next meet in December, AJ Bell's head of financial analysis, Danni Hewson, says. While easing inflation means people are finally feeling the benefit of wage growth in their pay packets, continued tightness in the labor market could also force employers' hands and push them to keep offering more pay to attract staff, she says in a note. That will create problems, she argues: "If households are feeling more confident and have a bit more room in the budget they are likely to spend that cash, which could prove inflationary," Hewson says.

-Edward Frankl

Swedish Inflation Drop Could See Riksbank Hold Rates Next Week

The probability of another Riksbank rate hike at next week's meeting has decreased following Swedish data that show core inflation is coming down, Nordea chief analyst Torbjorn Isaksson writes. Inflation excluding energy and interest-rate changes rose 6.1% in October on the year, compared to the 6.0% forecast by the Riksbank but down from 6.9% in September. Food prices were higher than Nordea had expected, while prices for other goods inflation as well as services inflation excluding foreign travel were slightly lower than the bank had projected. "For now we stick to our forecast that the Riksbank will hike the policy rate by 25bp to 4.25% later this month, but the probability for a rate hike has decreased."

-Dominic Chopping

Commentary The Trillion-Dollar Win Hiding in Your Mortgage

The leap in interest rates of the past two years means that an old fixed-rate loan should be thought of as one of your most valuable assets , rather than a deadweight loss you have to pay every month, James Mackintosh writes.

Beauty Stocks Tell an Ugly Story About China

Global cosmetics companies have enjoyed breathtaking growth for years thanks to Chinese consumers, but as everyone knows, beauty is fleeting-and China's economy is undergoing a head-to-toe makeover , Jacky Wong writes.

Basis Points The consensus forecast of economists surveyed by the Federal Reserve Bank of Philadelphia in the Survey of Professional Forecasters, the oldest quarterly survey of macroeconomic forecasts in the U.S., sees real gross domestic product increasing at a 2.4% rate this year and slowing to a 1.7% rate in 2024. The projections are 0.3 and 0.4 percentage points higher than estimates in the previous survey. (Dow Jones Newswires) Brazil economists cut their estimates for the country's inflation rate this year and raised slightly the forecast for next year, according to the Central Bank of Brazil's weekly survey. The median estimate of 153 economists is for consumer prices to increase 4.59% in 2023, versus 4.63% last week. The median forecast for 2024 rose to 3.92% from 3.91%. Brazil's headline inflation index rose 0.24% in October from September, less than expected. The country's central bank has said it intends to cut its benchmark lending rate by half a point at its December meeting, which would leave the rate at 11.75%. (DJN) The U.K.'s jobless rate stayed steady in

(MORE TO FOLLOW) Dow Jones Newswires

11-14-23 0717ET