{"id":7479,"date":"2023-10-02T11:31:26","date_gmt":"2023-10-02T17:31:26","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=7479"},"modified":"2023-10-02T11:34:33","modified_gmt":"2023-10-02T17:34:33","slug":"market-commentary-october-2-2023","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-october-2-2023","title":{"rendered":"Market Commentary | October 2, 2023"},"content":{"rendered":"\n
Inflation is slowing but consumers aren\u2019t feeling it.<\/p>\n\n\n\n
In August, for the first time in two years, inflation (excluding volatile food and energy costs) dropped below four percent. Last week, one of the Federal Reserve (Fed)\u2019s favored inflation measures \u2013 the Personal Consumption Expenditures (PCE) Price Index \u2013 indicated that prices rose 3.9 percent, year-over-year, in August 2023. That\u2019s an improvement from January, when prices rose by 4.9 percent, year-over-year, but it remains above the Fed\u2019s target of 2 percent.<\/p>\n\n\n\n
While slowing inflation is good news, many Americans are not feeling relief. \u201cEven as the Federal Reserve\u2019s favored measure of price gains eases, the cost of food, gasoline, car insurance and other essentials is still elevated after two years of persistent increases\u2026It costs $734 more each month to buy the same goods and services as two years ago for households who earn the median income,\u201d according to a source cited by Mark Niquette, Jarrell Dillard and Michael Sasso of The<\/em> Washington Post<\/em>.<\/p>\n\n\n\n Ongoing pain in the pocketbook is due, in part, to higher oil prices, which are not included in core inflation numbers. The price of crude oil rose to the highest level in more than a year last week, before falling slightly. Rising prices resulted from low inventories and reduced production levels among OPEC+ (the Organization of Petroleum Exporting Countries plus 11 other non-OPEC members) that reduced global oil supply, reported Lee Ying Shan of CNBC. In August, the cost of gasoline, lubricants, and other oil-related products rose, reported Jeffry Bartash of MarketWatch<\/em>.<\/p>\n\n\n\n Regardless of oil prices, investors were hopeful last week that the Fed might not raise rates again in 2023. Revised economic data from the Bureau of Economic Analysis showed the economy grew at a slightly slower pace in the second quarter of 2023 than it did in the first quarter. In addition, consumer spending, which is the primary driver behind economic growth in the United States, cooled. The data suggest the Fed is making progress \u2013 reducing price pressures by slowing economic growth and lowering demand for goods.<\/p>\n\n\n\n Stocks moved higher on Thursday before reversing course. The Dow Jones Industrial Average and Standard & Poor\u2019s 500 Index finished the week lower, according to Barron\u2019s<\/em>. Yields on longer-term U.S. Treasuries moved higher over the week.<\/p>\n\n\n\n