Market Minute: September 11th, 2025 - Key Data Releases: Inflation and Employment
We had two significant data releases this morning: the Consumer Price Index (CPI), providing a reading on inflation, and initial jobless claims. The CPI rose 2.9% year over year, in line with consensus expectations. The monthly inflation figure increased by 0.4%, slightly above estimates of 0.3%. Stripping out the volatile food and energy sectors gives us the Core CPI, which rose 0.3% last month and is up 3.1% over the past 12 months, matching estimates.
Turning to the employment market, jobless claims were notably higher than expectations, with a reading of 263,000 compared to 237,000 initial jobless claims last week. The surprise to the market was that they had anticipated a decline to 234,000. It is important to remember that employment statistics are reported weekly, making this a very volatile data series; longer-term trends provide a more reliable picture. In the current environment, however, near-term jobless claims carry extra weight because we are close to the next Federal Reserve meeting.
What the Data Means for Markets
On the one hand, inflation remains quite stubborn, which would bode against the Fed cutting interest rates. At the same time, inflation is not accelerating, so the market might interpret both the reading and the current inflation level as a “new normal.” In the employment market, the last employment report showed meaningful negative changes to the overall employment market, and today, we see more people filing for unemployment. On this basis, the market believes that the Fed may be more inclined to cut rates in support of the labor market. This tug of war will remain until the Fed's interest rate decision and the accompanying statement after their upcoming September meeting is announced.
Market Reaction
As I pen this at 10:00 AM on September 11th, the equity markets are all higher, the 10-year Treasury is moving closer to 4.0% and oil is down 1.5%. One day does not make a trend, but it appears that the market consensus leans toward a Fed cut, given that inflation is not worsening and the employment market is showing more than a small chink in the armor.
Give us a call at (475) 256-0174 to discuss this topic further and review how it may affect your investments.
Remembering September 11th
Finally, I’d like to address the date. We all remember September 11th, 2001. I was at a client meeting in New Hampshire when the attacks happened, and one of the people there learned that their daughter escaped Tower 2 alive. More than a few people I knew were killed that day, including someone I was to have dinner with on that fateful evening. I always pause and remember David and all the lives lost that day.
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