Dow Edges Higher as Cooler Inflation Data Eases Fears of October Rate Hike
The Dow Jones Industrial Average rose 64.96 points to 51,414.88 on Wednesday after the Federal Reserve's preferred inflation gauge came in cooler than expected and private employers added more jobs than forecast.
According to the Commerce Department, prices rose a seasonally adjusted 0.3% in August from July, putting the 12-month gain at 3.4%. The core measure, which excludes volatile food and energy prices, was even softer, rising 0.2% for the month, bringing the annual rate to 3%.
Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said that while inflation remains above the Fed's 2% target, the report leaves the October decision still in play, with the outcome likely hinging on September consumer and producer price data, gasoline prices and geopolitical developments in the coming weeks.
The strong hiring numbers were a welcome surprise for markets. Payroll processor ADP said private employers added 90,000 jobs in September, up from a downwardly revised 36,000 in August and above the consensus estimate of 68,000.