September\u2019s Consumer Price Index (CPI) rose 0.3% month over month (m\/m) and 3% year over year (y\/y), while the core segment, which excludes food and energy due to their volatile characteristics, increased 0.2% and 3%. All four numbers arrived below expectations by 0.1% while the monthly figures decelerated m\/m by the same 0.1% amount. Annualized results shifted in bifurcated fashion, meanwhile, as the previous print posted 2.9% for headline and 3.1% for core. Helping to drive the headline miss were deflationary outcomes in used automobiles and the electricity\/heating category, with cost declines of 0.4% and 0.7% m\/m. Another significant development came from decelerating housing pressures, as shelter slowed from a 0.4% rate in August to 0.2% last month. Elsewhere, gasoline, apparel, food at markets, transportation services, medical care services, new cars and drinking\/dining establishments saw charges increase 4.1%, 0.7%, 0.3%, 0.3%, 0.3%, 0.2% and 0.1% m\/m.<\/p>\n\n\n\n Economic growth is thriving at the second fastest pace of the year with new orders driving beats across both categories of the S&P Global Flash Purchasing Managers\u2019 Index (PMI) and countering the impacts of the government shutdown. The headline scores for services and manufacturing accelerated to 55.2 and 52.2 from 54.2 and 52, exceeding expectations for 53.5 and 52. The results were well ahead of the contraction-expansion threshold of 50. Hiring improvements were able to offset the negative forces of worsening business confidence and compressing margins, as firms increasingly competed for sales as signaled by rising input costs amidst stabilizing selling charges. Employment gains were contained by a lack of suitable candidates, however, and declines in sentiment were limited by optimism about lighter interest rates. Conversely, exports suffered as tariffs and weaker activity from international economies weighed on transactions. <\/p>\n\n\n\n Markets are poised to rally into year-end as an accelerating economy coincides with an extended series of reductions from the Federal Reserve. The anticipated monetary policy accommodation bodes well for a broadening in equities, allowing the more cyclically oriented, rate-sensitive components to potentially begin outperforming and drive a healthier composition across the major domestic benchmarks, in which tech stocks have been dominating recently. Indeed, excitement in the Russell 2000, today\u2019s leader amongst the indices, is emblematic of the small-cap gauge standing to benefit from loosening financial conditions while larger old-school categories are likely to also participate in appreciation. Meanwhile, October\u2019s real-time annualized measures of inflation are trending lower, as lighter gasoline prices and positive base effects are likely to support easing projections in 2026 since 50 basis points of cuts are essentially in the bag at this point. Finally, seasonal tailwinds are right around the corner, as turkeys and Santa Claus have historically been bullish for stocks.<\/p>\n\n\n\n Eurozone manufacturing is no longer in contraction, but it is still a hair shy of expanding, according to the October HCOB Flash Eurozone Manufacturing PMI. On a broader basis, Eurozone economic activity is expanding at a faster pace than in September. The manufacturing gauge climbed from 49.8 to 50, the contraction-expansion threshold, while the PMI that focuses on the output from goods producers moved from 50.9 to 51.1. More encouragingly, the broader composite PMI climbed from 51.2 to 52.2, a 17-month high and the services sector gauge hit a 14-month high of 52.6, up from September\u2019s 51.3. Businesses increased their activity in response to a steeper increase in orders and new business. This trend was led by services, but manufacturing demand also picked up. Employment, meanwhile, grew in services but contracted in manufacturing at the fastest pace in four months. Also discouraging, overall business confidence fell to a five-month low.<\/p>\n\n\n\n The UK\u2019s composite PMI strengthened this month with support from both services and manufacturing sectors. The broad gauge climbed from 51.2 to 52.2, exceeding the economist consensus estimate of 51.2.<\/p>\n\n\n\n Retail sales in the UK climbed 0.5% m\/m and 1.5% last month, beating the economist consensus estimates for a monthly decline of 0.2% and an annual ascent of 0.6%. In August, retailing increased 0.6% m\/m and 0.7% y\/y.<\/p>\n\n\n\n Singapore\u2019s biomedical manufacturing flexed its clout last month, pushing industrial production in September past estimates following a discouraging August. Overall output in September jumped 26.3% m\/m and 16.1% y\/y, according to the Singapore Economic Development Board. The metrics were significantly stronger than the economist consensus estimates of 8.6% and 0.5%. In August, production dropped 11% m\/m and 9% y\/y.<\/p>\n\n\n\n When excluding the island-nation\u2019s biomedical sector, industrial output last month was up 0.8% m\/m and 5.4% y\/y. The biomedical manufacturing group led the y\/y expansion with gains of 45.9%. Within this category, pharmaceutical manufacturing activity was 55.3% higher than in the year ago period. The following categories and the extent of their increases also contributed to the headline strength:<\/p>\n\n\n\n Conversely, general manufacturing and precision engineering slipped 4.7% and 5.9%, respectively.<\/p>\n\n\n\n Declining financing costs, generational wealth transfers and investments from foreign residents supported housing demand during the third quarter and drove prices of private homes up 0.9% from the April-June period, according to the Urban Redevelopment Authority. Economists anticipated a 1.2% ascent. Nevertheless, it was the fourth consecutive quarter of price increases with the preceding period experiencing a 1% gain.<\/p>\n\n\n\n Japan Purchasing Managers Index Falls<\/strong><\/p>\n\n\n\n Japan\u2019s Manufacturing and Services PMI slipped from 51.3 in September to 50.9 month, the weakest level in five months. The manufacturing component descended further into contraction, dropping from 48.5 to 48.3 and missing the economist consensus estimate of 48.8. Services continue to grow but at a slower pace, with the sector\u2019s PMI sinking from 53.3 to 52.4. So far this month, the rate of payroll growth slowed, business sentiment weakened and new work orders fell for both sectors. Foreign demand also weakened but the pace of the decline slowed. Businesses in both sectors reported higher input costs and raising their selling prices. <\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Investors are grabbing the bull by the horns after this morning\u2019s lighter-than-anticipated CPI bolstered the case for a series of rate cuts this year and next. <\/p>\n","protected":false},"author":903,"featured_media":206724,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,5,12711,6,8,9,26,3],"tags":[217],"contributors-categories":[13760],"class_list":{"0":"post-233381","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asia","8":"category-europe-middle-east-africa","9":"category-ibkr-economic-landscape","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-text-articles","14":"category-traders-insight","15":"tag-cpi","16":"contributors-categories-ibkr-macroeconomics"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/10\/Picture23-1100x800.png\")
<\/figure>\n\n\n\nUS Purchasing Managers\u2019 Index Advances<\/strong><\/h3>\n\n\n\n
Softening Inflation, Positive Base Effects to Spark Year-End Rally<\/strong><\/h3>\n\n\n\n
International Roundup<\/strong><\/h2>\n\n\n\n
Eurozone Manufacturing Creeps Out of Contraction<\/strong><\/h3>\n\n\n\n
UK PMI Strengthens<\/strong><\/h3>\n\n\n\n
While Consumer Spending Exceeds Estimates<\/strong><\/h3>\n\n\n\n
Singapore Biomedical Sector Surged Last Month<\/strong><\/h3>\n\n\n\n
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Singapore Home Prices Also Jump<\/strong><\/h3>\n\n\n\n