US Inflation.. When the "Surprise" Comes from a "Missing" Month

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In the world of data, the most beautiful number is not necessarily the most accurate.
Recently, US inflation data was released to give the markets an unexpected "gift":

Core CPI (Core CPI) suddenly drops to 2.6%, recording its lowest level since March 2021.

Superficially, it seems the Federal Reserve has scored a knockout victory.
But, as is often the case in financial markets, the devil is in the details.. and in what is "not written".
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1. The Mystery of the Missing Month (The Data Void):
The story that many do not talk about is that the October report was actually "canceled" due to the government funding crisis (Lapse in appropriations).

This means that the Bureau of Labor Statistics (BLS) had to build this month's report based on "assumptions" (Assumptions) to fill the gap, and even assumed zero in some inflation fields for October due to lack of data!

We are looking at excellent numbers, but they are based on a slightly "shaky" statistical foundation.
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2. Who Led the Decline? (Oil and Rents):
Beyond data quality, the tangible reality indicates a real cooling:

Oil:
As mentioned in a previous article, prices collapsed to $55 per barrel, the lowest since February 2021. This is a real contraction in energy costs.

Housing (Shelter):
Recorded its largest decline in two months since the pandemic. The rent bubble is clearly bursting.
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3. The Other Side of the Coin.. The Silent Pain:
Lower inflation comes at a cost, and that cost is paid by the labor market.
The unemployment rate rose to 4.6%, the highest since 2021.

When the economy cools, employment cools too.

This is an unavoidable rule.
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4. The Bitter Truth for Consumers:
We must always differentiate between "disinflation" (Disinflation) and "deflation" (Deflation).

Prices have not fallen; they are just rising more slowly. From 2020 to today, cumulative inflation (Cumulative Inflation) has reached 25.2%.

American citizens do not feel prosperous; they feel the bleeding has slowed, but prices are still at towering peaks.
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Summary:
The market has started pricing in a 28% chance of rate cuts in January.

The numbers are pushing the Fed to shift from "fighting inflation" to "saving jobs".

We are heading towards a soft recession, and the "estimated" data for this month may just be a prelude to an economic reality slower than we imagine.

Follow me $GT # to read together what the official numbers hide.