Dow Jones, S&P 500 and Inflation

Inflation is expected to ease in October, in part due to improved supply chains, but weakness in the real estate sector has led to lower demand for home appliances and other goods.

Also, the latest inflation data may benefit from the way the BLS tabulates the index. To calculate the price of medical services, the agency uses the retained earnings or profit margins of health insurance providers. The data is published annually, and it comes with laughter. Over the past 12 months, the healthcare services category has reflected strong profit margins since 2020, when people stayed home or delayed medical care – but this will be rebalanced in the October report, which will reflect a recovery in 2021 Elective surgeries and other medical services.

CPI has moved higher over the past two months, indicating that overall price growth has only moderated slightly over the 12-month period, with core CPI rising much faster than expected.

Housing remains the driver of inflation, but the spike in core CPI reflects a potentially thorny problem: inflation has penetrated into the services sector.

Unlike inflationary inputs in commodities, which include supply chains and commodity prices, the largest input in service-providing industries is labor costs.

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