CPI
✅US August CPI 2.5% YoY versus 2.6% expected
✅Prior month 2.9%
✅CPI YoY rose 2.5%. That was the smallest 12 month increase since February 2021.
✅CPI MoM 0.2% versus 0.2% expected
✅Month over Month unrounded 0.187%

Core measures highlights:
✅Core CPI YoY 3.2% vs 3.2% expected.
✅Core CPI MoM 0.3% vs 0.2% expected
✅Real weekly earnings +0.5% versus -0.2% last month
✅Shelter inflation rose by 0.5%
✅Food increase by 0.1% after rising 0.2% in July
✅Energy prices fell -0.8% versus unchanged last month.
✅The energy index decreased 4.0 percent for the 12 months ending August.
✅The food index increased 2.1 percent over the last year.
✅Shelter index increased 5.2% over the last year, contributing over 70% to the total 12-month increase for items less food and energy.

🤷‍♂️This CPI release likely forces the Fed hand to a 25bp cut.
🤷‍♂️This may prove to be cut too small and too late, considering that YoY Inflation is back to 2018 levels

🤷‍♂️However forward guidance via the SEP report may lower risks of significant market correction and ease recessionary fears.

Non-farm payrolls

✅US August non-farm payrolls +142K vs +160K expected
August 2024 US employment data from the non-farm payroll’s reportPrior was +114K

Details:

✅Two-month net revision: -86K versus -29K prior
✅Unemployment rate: 4.2% versus 4.2% expected (prior was 4.3%)
✅Participation rate: 62.7% versus 62.7% prior
✅Change in manufacturing payrolls: -24K versus +1K prior
✅Household survey: +168K versus +67K prior
✅Government jobs: +24K versus +17K prior
✅Full time: -438K versus +448K prior
✅Part time: +527K versus -325K prior

Interest Rate Probabilities

✅43% chance of a 50 bps cut ahead of the release and 110 bps of easing priced in this year ahead of the release. Immediately afterwards, that’s up to 57% and 119 bps.

FOMC Waller : Time has come to begin reducing. Labor market softening/not deteriorating

Canada
✅Bank of Canada interest rate decision: Rates lowered by 25 basis points to 4.25%
✅Bank of Canada overnight rate was 4.50% before the decision
✅Markets were pricing in a 76% chance of a 25 bps cut and 24% chance of 50 bps
✅Preliminary indicators suggest that economic activity was soft through June and July
✅The labour market continues to slow
✅Wage growth remains elevated relative to productivity
✅High shelter price inflation is still the biggest contributor to total inflation but is starting to slow