Stocks Surge As More Data Shows Inflation Cooling

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What's Happening Today

There's another sign that inflation is cooling.

After the Consumer Price Index (CPI) last week showed inflation easing, today the Labor Department released its Producer Price Index (PPI) for October, showing that wholesale prices rose less than expected. The PPI increased 0.2% last month, less than the 0.4% economists anticipated. The index was 8% higher since last year, down from 8.4% the month before.

The better-than-expected inflation data gave investors something to cheer about—stocks are jumping today on the news. The more inflation cools, the less likely it becomes that the Federal Reserve will aggressively hike rates at its policy meeting next month. Markets believe there is an 85% chance that the central bank will only increase rates by 50 basis points (bp), lower than the 75-bp hikes we've seen over the past few months.

Lower wholesale inflation isn't just good for markets—it's good for us, too. Many stores will pass on higher costs to shoppers, so if wholesale inflation declines, it could mean lower prices for us.

And if rate hikes aren't as aggressive, then loans and debt won't be as expensive either, so this could be good news for anyone interested in buying a house or those holding credit card debt.

- Kristin

Editors' Picks

Interest Rates on Retail Credit Cards Are 'Crazy High,' With Some Topping 30% (CNBC)

A Six-Figure Income Is Needed Just To Afford the Typical US Home (Bloomberg)

Housing Agency Reports Record Financial Cushion as It Braces for Market Downturn (The Wall Street Journal)

More Than 9 Million People Eligible for Unclaimed 2021 Tax Credits (The Balance)

6 Tax Credits To Reduce Your Business Taxes (The Balance)

Health Insurance Options for the Self-Employed (The Balance)

How To Spot Stock Trends Before Everyone Else (The Balance)

Term of the Day

FICO Score

If you're looking into your credit report or trying to get approved for a loan or credit card, you're bound to come across your FICO score, which is the most widely used branded credit score. There are 27 million FICO scores sold each day, and they're used by 90% of all lenders to make decisions in the United States.

Each of the three major credit bureaus—Equifax, Experian, and TransUnion—calculates scores using FICO's formulas and information in detailed reports they keep on your credit history. Scores range from 300 to 850, with a higher score representing a lower risk to lenders.

In terms of general meaning, scores higher than 700 are considered good, while scores higher than 750 are considered excellent.

Off the Charts

Credit card debt, which plunged during 2020 and 2021, has returned nearly to pre-pandemic levels after a record 15% year-over-year spike in debt in the third quarter of 2022, according to the New York Fed.