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Fed’s preferred gauge showed core inflation at 3.0% in August, much lighter than expected

Consumer prices posted a smaller-than-expected increase in August from a year ago, according to the Federal Reserve's primary inflation gauge, the Commerce Department reported Wednesday. The personal consumption expenditures price index rose a seasonally adjusted 0.3% for the month, putting the 12-month gain at 3.4%. Economists surveyed by Dow Jones had been looking for increases of 0.3% and 3.7%, respectively. Excluding food and energy, PCE posted a 0.2% climb that put the annual core level at 3%. The respective forecasts were for 0.3% and 3.3%. Though the Fed officially follows the headline PCE number, officials generally consider core a better gauge of longer-term trends. While the annual increases were less than expected, they came as the Bureau of Economic Analysis changed the way it computes several components of the index. The BEA adjusted methodology for how it measures prices for legal services, software and computer accessories and portfolio management. Stock market futures gained ground following the report while Treasury yields were negative. Traders priced in less of a chance of a Fed rate hike in October, pushing the next expected increase to December. "This is good news for investors worried about the recent surge in bond yields, and it bolsters the case for not hiking in October," said David Russell, global head of market strategy at TradeStation. "However, it's also relatively old data at this point that doesn't reflect this month's surge in diesel prices." The report also showed that personal income rose 0.2% while spending increased 0.9%, against the respective consensus for 0.4% and 0.8%. Both PCE levels are still considerably higher than the central bank's 2% target, raising the possibility that the Fed will follow up its September interest rate hike with another increase at either of its remaining meetings this year — in October or, more likely, December. "Even after major methodological revisions, PCE inflation is still running hot however you cut it," said Sonu Varghese, global macro strategist at Carson Group. "The economy is running hot, policy remains easy, and the Fed's challenge is figuring out how much restraint is needed. That's a tailwind for stocks as we move into Q4." Energy costs were the primary culprit for the price rise in August, though multiple other sectors also showed gains. Gasoline jumped 4.4% and transportation services accelerated by 1.4%. Energy goods and services climbed 2.3%. "The PCE Inflation data – the Federal Reserve's favorite – show no progress in August on inflation," said Heather Long, chief economist at Navy Federal Credit Union. "And it's inevitable that September will be higher. Meanwhile, American consumers are feeling the squeeze."

Fed’s preferred gauge showed core inflation at 3.0% in August, much lighter than expected
North America
CNBC Finance

Holiday retail sales are expected to top $1 trillion as inflation boosts growth

Despite macroeconomic pressures and a cautious consumer, retail sales this holiday season are expected to grow year-over-year as spending remains strong. According to Bain & Company's annual forecast, holiday retail sales are expected to top $1 trillion for the first time, marking a 4.5% growth. That growth is largely projected to be from in-store sales at 70%, though e-commerce is continuing to gain share. The holiday spending is supported by higher tax refunds, which are up $43 billion this year, or 17% year over year, adding more cash to consumers' wallets. Even still, the report noted that Bank of America estimates half of that benefit has already gone to higher gas prices, which have significantly squeezed budgets. Bain also noted that the headline spending increase is underscored by rising inflation, which accounts for most of the growth, making actual unit growth thinner than it appears. Categories that are most affected by inflation with unit decline include food and beverage, furniture, and health and personal care. The spending forecast comes as the Conference Board reported Tuesday that consumer confidence fell to its lowest level since 2014 in September. Respondents said they were worried about inflation and the jobs outlook. Still, Deloitte forecast a similar projection to Bain, saying it expects holiday retail sales to reach $1.7 trillion this year. It noted that consumers are going to get more creative about how they're spending their money, including looking for discounts and markdowns. "As they look to get more out of their dollars, we continue to see value-seeking behaviors across income levels, including switching among brands and retailers and using promotions to manage spending," said Natalie Martini, vice chair of Deloitte and U.S. retail and consumer products leader. "These behaviors are expected to shape how consumers approach holiday shopping this season." That's a trend echoed by Adobe's holiday shopping report, which expects value-first shopping to power growth and share this year. The company also said it expects buy now, pay later spending to hit a record of $21.3 billion as consumers become more intentional with how they're spending their money. In another sign of changing habits, consumers have smaller baskets when they're checking out, but they're making more frequent trips, especially when it comes to grocery shopping, according to AlixPartners' holiday projections report. They're also shifting from premium to private-label brands and buying fewer, higher-quality items. "Consumers are not cutting back evenly across every category," Sonia Lapinsky, leader of fashion retail at AlixPartners, said. "They are becoming more selective about self-gifting and looking for ways to preserve quality while staying within their budgets." Artificial intelligence will also be a theme for discovery and purchasing this holiday season. According to Adobe, AI-driven traffic to retail sites grew 127% year-over-year in August and is expected to grow 130% year-over-year overall through the holiday season and 141% year-over-year on Thanksgiving. According to PwC's holiday report, 29% of consumers plan to use AI somewhere in their holiday shopping this year. That's up from 22% last year.

Holiday retail sales are expected to top $1 trillion as inflation boosts growth
North America
CNBC Economy

The Fed's main inflation measure will be released Wednesday. Here's what to expect

If anyone at the Federal Reserve is looking for evidence arguing against another interest rate hike, they're unlikely to get it in data due Wednesday that is expected to show ongoing price pressures and consumers who nevertheless continue to spend. The personal consumption expenditures price index, the primary inflation gauge for central bank policymakers, is expected to show increases of 0.3% at both the all-items and core levels, the latter of which excludes food and energy costs, according to the Dow Jones consensus. On an annual basis, the price levels are expected to show increases of 3.7% and 3.3%, respectively, unchanged from July and still well above the Fed's 2% target. In other words, there's little indication that inflation is going to abate anytime soon. "The Fed is going to look at this and say, 'Hey, you know, the core is not moving, and I don't have any expectations or anything to believe that it's going to start going back down in any sort of convincing way,'" said Dan North, senior economist at Allianz Trade. "It's still way above target ... So I think it's really embedded in there to the extent that the Fed is not going to be able to ignore it or explain it away." Fed officials at their September meeting approved a quarter percentage point rate increase and penciled in the likelihood of another by the end of the year. All but two of the 18 Federal Open Market Committee officials who provided forecasts indicated they expect at least one more move in 2026 as they raised their consensus PCE inflation outlook. Fed Chairman Kevin Warsh said at his news conference earlier this month that hiring data along with business investment and private sector earnings show the economy in good shape. "I would be hard pressed to describe broad financial conditions as restrictive," Warsh said. Financial conditions are an important input for how the Fed calibrates rate policy. Similarly, Fed Governor Michael Barr said Tuesday that the combination of tariffs and the prolonged war with Iran has meant "we have been knocked off course on our progress toward our 2% goal." Moreover, he added, "I don't yet see a clear trend toward a timely return to 2%." Consequently, Barr reiterated his belief that the Fed likely will need to continue to raise rates, though he did not specify a level. The September move put the central bank's borrowing benchmark in a range of 3.75%-4%. "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion," he said. "We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that."

The Fed's main inflation measure will be released Wednesday. Here's what to expect
North America
CNBC Finance

Trump says he approved new fuel economy standards, rolling back Biden-era rules

President Donald Trump on Saturday said he approved new fuel economy standards, reversing former President Joe Biden's stricter policies meant to fuel electric vehicle adoption. Since the Corporate Average Fuel Economy, or CAFE, standards were established in 1975, they have been periodically updated, typically to make vehicles more efficient. Under former President Joe Biden's standards, automakers would have had to increase the fuel efficiency of their passenger cars and light trucks to roughly 50 miles per gallon by 2031. The stricter standards were designed to incentivize electric vehicle production and sales in the U.S. Trump presented the policy change as a boon for both automakers and consumers, though the final standards have not yet been publicly detailed. "These new Standards will take the waste out of building cars in America. That means LOWER PRICES, saving families thousands on a new, beautiful, and safe car — Far better than the Environmental Monsters that we were building heretofore," he wrote in the Truth Social post. "Every Manufacturer, from General Motors to Ford to Stellantis, has called me wanting to build here, and now they can!" The regulatory change would fulfill a campaign promise from Trump to rescind policies that encouraged or incentivized electric vehicles. It is unclear what the final fuel economy standards will be, although Transportation Secretary Sean Duffy previously said that they would be sharply lower than the Biden-era policies. Weaker fuel economy standards mean that automakers can produce more pickup trucks and SUVs, which are much more profitable than smaller cars but have worse gas mileage. Electric vehicles also become much less attractive to automakers, although some companies, like General Motors, have said that they will still make them. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Trump says he approved new fuel economy standards, rolling back Biden-era rules
North America
CNBC Finance

Ford CEO says it's 'too late' for Europe to fend off Chinese automakers, but not for U.S.

DETROIT — Ford Motor CEO Jim Farley said Tuesday he believes politicians should take lessons learned from Europe when deciding whether to allow Chinese automakers into the U.S., cautioning that it's "too late" for that region but not for the American market. "I think it's just important for us to take our time to be considerate," Farley said at the Automotive News Congress in Detroit. "I watch what's happening in Europe right now, where that was not the case, and it's really something that they have to deal with now, and it's too late." Global market share for Chinese brands jumped nearly 70% from 2020 to 2025, according to market research and consulting firm GlobalData. Chinese automakers' market share in Europe was virtually nothing in 2020 but hit 12% in August, according to Germany-based Dataforce. Farley's comments come as Ford tries to compete against an influx of Chinese automakers entering Europe, while also attempting to partner with some Chinese companies to fill plants and assist in other technologies, such as electric vehicle batteries. Ford and China automaker Geely said in July that Geely planned to build EVs at a Spain plant owned by the Detroit automaker by early next year through a new manufacturing joint venture. "Our answer is pretty simple. We're going to partner with the Chinese where we don't have [intellectual property], where we can be more capital efficient in places like Europe or Southeast Asia," Farley said Tuesday. He also added that Ford plans to also compete against the Chinese, noting that it's preparing to launch its "universal electric vehicle" next year with a pickup truck. The Trump administration sent the automaker a letter earlier this month expressing "profound concern" about its ties to Chinese companies and questioning its strategic trajectory. Ford at the time defended its stance as America's top-producing carmaker and said it employs more hourly workers in the country than any other automaker. Farley's warning also comes on the heels of a high-profile visit last week by Chinese President Xi Jinping with President Donald Trump, who earlier this month said he might be "OK" letting Chinese automakers into the U.S. if they produced vehicles domestically. There also are bills in Congress that could restrict or even permanently ban Chinese automotive brands from entering the U.S. market. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Ford CEO says it's 'too late' for Europe to fend off Chinese automakers, but not for U.S.
North America
CNBC Finance

David Ellison names Ynon Kreiz co-CEO of Paramount and Warner Bros. Discovery

Paramount Skydance CEO David Ellison announced on Wednesday the appointment of outgoing Mattel Chief Executive Officer Ynon Kreiz as his co-CEO of the anticipated combination of Paramount and Warner Bros. Discovery. The pair will lead as "one team," with Kreiz set to take on the operational duties of the media company, according to a press release. Kreiz will become co-CEO effective at the closing of the merger and will also join the company's board of directors. "Ellison will focus on the company's long-term strategy, creative vision and direction, including its talent relationships, strategic partnerships, technology and capital allocation," Paramount stated in the release. "Kreiz will focus on the company's day-to-day management and integration of the combined businesses." The announcement comes less than two weeks after Paramount settled an antitrust lawsuit with a group of state attorneys general that sought to block the $110 billion merger. A federal judge on Wednesday entered an order to allow the merger to close. "Bringing together Paramount and Warner Bros. Discovery to create a next-generation global media company is a transformational moment for our industry," said Ellison in the release. "Leading it takes a rare combination of strategic vision, operational depth and experience running a public company at the highest levels of media. Ynon brings all three." In a separate release late Wednesday, Paramount said the merger would close on Oct. 6 Earlier on Wednesday, Mattel announced Kreiz was departing the company after eight years in the top job. During his tenure, Kreiz led the company through major transformations and oversaw the release of "Barbie," the highest-grossing domestic film release of 2023. The events on Wednesday set up the end of a long back-and-forth battle through which Ellison has sought to expand his media empire. He first set his sights on Warner Bros. Discovery in September 2025 and since then has faced a bidding war against Netflix and a legal challenge over antitrust concerns. The transaction, which will be one of the largest media mergers in history, is expected to be completed in the coming weeks. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

David Ellison names Ynon Kreiz co-CEO of Paramount and Warner Bros. Discovery
North America
CNBC Finance

Mattel names Roger Lynch as CEO, replacing Ynon Kreiz

Mattel on Wednesday named Roger Lynch as its new CEO and chairman, succeeding Ynon Kreiz. Lynch, who has been a member of Mattel's board since 2018, will take the reins as chairman on Oct. 2 and CEO by Nov. 2, according to the press release. Lynch is currently the CEO of Condé Nast, a position he has held since 2019. Mike Perlis will serve as Condé Nast's interim CEO while the board begins it search for Lynch's successor, according to a letter from Lynch. "I am honored by the Board's confidence in me and couldn't be more excited to lead the incredible team at Mattel," Lynch said in the release. "Throughout my years on the Board, I have admired Mattel's brands, its talented people, and unique culture." Kreiz will leave Mattel after more than eight years at the helm to become the co-CEO of the anticipated merged company of Paramount Skydance and Warner Bros. Discovery, according to a press release. Kreiz will serve as CEO alongside current Paramount CEO and chairman David Ellison. The announcement comes less than two weeks after Paramount settled an antitrust lawsuit with a group of state attorneys general that sought to block the merger. Kreiz has led the toymaker and entertainment company through major transformations, including the release of "Barbie," which became the highest-grossing domestic film release of 2023. "It has been a privilege to lead Mattel, with a global team dedicated to its mission and purpose, and I am proud of all we have achieved together," Kreiz said in a statement. "Mattel is in a position of strength, with a world-class brand portfolio, product offering, and global capabilities." Mattel has been working on bolstering its iconic brands, with Hot Wheels as a notable strength. The company is also attempting break into the digital games space in a bid to match rival Hasbro. It acquired full control of its Mattel163 Mobile Games Studio earlier this year. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Mattel names Roger Lynch as CEO, replacing Ynon Kreiz
North America
CNBC Finance

Stellantis CEO reconfirms 2026 guidance, says turnaround plan continues as automaker's shares hit new low

DETROIT — Stellantis CEO Antonio Filosa on Wednesday reconfirmed the company's 2026 guidance and longer-term cash flow targets as U.S. shares of the embattled automaker trade at an all-time low. "We are completely committed and we are convinced that we will do that," Filosa said Wednesday about Stellantis' forecast for this year of a mid-single-digit percentage increase in net revenue and a low-single-digit adjusted operating margin. Filosa also reconfirmed the company is aiming to be cash flow positive by next year and generate more than 3 billion euros ($3.4 billion) of free cash flow in 2028. The stock ended Tuesday at a new closing low for the company's U.S. shares, contributing to a roughly 60% loss so far this year. The stock is on track for its worst annual performance since the automaker was formed through the merger of Fiat Chrysler and PSA Groupe in January 2021. Shares of the company fell further Wednesday, closing the day 1.58% lower, at $4.36 a share. The trans-Atlantic automaker has been executing a roughly $70 billion turnaround plan following margin dilution and yearslong sales declines, especially in North America and the U.S. Filosa's turnaround strategy has included focusing on regional brands to boost sales, such as Ram and Jeep in the U.S., but it is not cutting down its vast portfolio of 14 automotive brands. The plan's core pillars are "sharper management" of the brand portfolio, new investments, enhanced partnerships, an optimized manufacturing footprint, "excellence in execution," and empowerment of the company's regions and local teams. RBC Capital Markets analyst Tom Narayan on Tuesday in an investor note said despite public comments to keep the company together, the firm views a "break-up as a plausible longer-term scenario" for Stellantis. The goal is for the company to achieve positive free cash flow by 2027. Free cash flow for the automaker was a loss of 4.5 billion euros last year. "The mantra of the reset is around freedom of choice," Filosa, who became CEO in June 2025, said Wednesday during an Automotive News event in Detroit. "It's around listening more to the customer." Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Stellantis CEO reconfirms 2026 guidance, says turnaround plan continues as automaker's shares hit new low
North America
CNBC Economy

Private sector jobs rose by 90,000 in September, better than expected, ADP reports

Private job creation picked up in September after a brief slowdown, providing further indication that the U.S. labor market has stabilized, according to an ADP report Wednesday. The payrolls processing firm said company employment rose by 90,000 for the month, higher than the downwardly revised 36,000 in August and better than the Dow Jones consensus estimate for 68,000. There also was a fair amount of balance in the report, with service providers adding 59,000 positions while goods producers contributed 31,000. "It's a strong report," said ADP's chief economist, Nela Richardson. "After a three-month slowdown, job creation rebounded and pay growth remained solid." Education and health services contributed the most, with 55,000 new hires. Other areas of growth included leisure and hospitality (22,000), manufacturing (17,000), and construction (15,000). A handful of sectors saw job losses, including financial activities (-16,000), professional and business services (-11,000), and natural resources and mining (-1,000). Much of the employment growth came from the Northeast, which added 56,000. By size, companies with between 50 and 499 workers saw a gain of 54,000. Broadly, the report helped confirm sentiment expressed by multiple Federal Reserve officials that the labor market is mostly sound following a growth scare in 2025. Policymakers see the greater policy risk now as the persistent inflation that pushed central bankers to raise benchmark borrowing rates by a quarter percentage point earlier in September. The ADP count serves as a precursor to the nonfarm payrolls report that the Bureau of Labor Statistics will release Friday. The Wall Street consensus is for a gain of 84,000 jobs, down from a 162,000 increase the prior month, and the unemployment rate to hold steady at 4.1%. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Private sector jobs rose by 90,000 in September, better than expected, ADP reports