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U.S. consumer inflation muted, just don’t buy a used car

U.S. consumer inflation muted, just don’t buy a used car

By Dan Burns

(Reuters) – U.S. consumers on balance paid only a little bit more for goods and services last month as supply chain disruptions that contributed to a bump up in inflation over the summer began to ease, a welcome respite for the millions who remain unemployed.

While that easing pressure on pinched consumers might offer a benefit to Republican President Donald Trump’s reelection prospects against Democratic challenger Joe Biden, it does come with a big “on the other hand” caveat: It is the latest sign of fading momentum in the rebound from this spring’s record-setting economic slump.

A bit of inflation typically is an indication of strengthening demand, an encouraging signal that consumers have reliable sources of income allowing them to contribute to growing an economy that hinges extensively on their spending. But with roughly 11 million still out of work and desperate for a new round of COVID-19 relief from Washington, September’s modest uptick in prices is no such signal.

Here’s Jefferies chief financial economist Aneta Markowska’s take: “After several months of above-trend gains, price pressures are finally normalizing. Both headline and core CPI increased by just 0.2% (month-to-month) in September, with the underlying details painting an even weaker picture.”

Graphic: September CPI: All about used vehicles https://fingfx.thomsonreuters.com/gfx/mkt/azgvojwqepd/Pasted%20image%201602602548532.png

In fact, she notes prices would have been unchanged but for one thing: The largest monthly increase in used car and truck prices since 1969. And with cash-strapped consumers increasingly reliant on their own transport to get to an on-site job, that’s no welcome development.

Food price increases, too, are moderating after a big run up in the spring, but where you eat makes a big difference.

If eating at home, as millions without work have no choice but to do, then food prices were lower for a third

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Fast Take: U.S. Consumer Inflation Muted, Just Don’t Buy a Used Car | Investing News

Fast Take: U.S. Consumer Inflation Muted, Just Don’t Buy a Used Car | Investing News

(Reuters) – U.S. consumers on balance paid only a little bit more for goods and services last month as supply chain disruptions that contributed to a bump up in inflation over the summer began to ease, a welcome respite for the millions who remain unemployed.

While that easing pressure on pinched consumers might offer a benefit to Republican President Donald Trump’s reelection prospects against Democratic challenger Joe Biden, it does come with a big “on the other hand” caveat: It is the latest sign of fading momentum in the rebound from this spring’s record-setting economic slump.

A bit of inflation typically is an indication of strengthening demand, an encouraging signal that consumers have reliable sources of income allowing them to contribute to growing an economy that hinges extensively on their spending. But with roughly 11 million still out of work and desperate for a new round of COVID-19 relief from Washington, September’s modest uptick in prices is no such signal.

Here’s Jefferies chief financial economist Aneta Markowska’s take: “After several months of above-trend gains, price pressures are finally normalizing. Both headline and core CPI increased by just 0.2% (month-to-month) in September, with the underlying details painting an even weaker picture.”

Graphic: September CPI: All about used vehicles https://fingfx.thomsonreuters.com/gfx/mkt/azgvojwqepd/Pasted%20image%201602602548532.png

In fact, she notes prices would have been unchanged but for one thing: The largest monthly increase in used car and truck prices since 1969. And with cash-strapped consumers increasingly reliant on their own transport to get to an on-site job, that’s no welcome development.

Food price increases, too, are moderating after a big run up in the spring, but where you eat makes a big difference.

If eating at home, as millions without work have no choice but to do, then food prices were lower for a third straight month.

If

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Muted Loan Growth to Mar Truist Financial (TFC) Q3 Earnings

Muted Loan Growth to Mar Truist Financial (TFC) Q3 Earnings

Truist Financial Corporation TFC is slated to announce third-quarter 2020 results on Oct 15, before market open. Per the Fed’s latest data, commercial and industrial loan (C&I) balances (accounting for almost 50% of the company’s total loans and leases held for investment) declined in the third quarter as overall lending activities remained muted due to continued fears related to the coronavirus outbreak.

Moreover, the Zacks Consensus Estimate for average earning assets for the to-be-reported quarter is pegged at $435.2 billion, indicating a 2.6% decline from the prior quarter’s reported figure.

Thus, because of muted growth in loans along with near-zero interest rates, Truist Financial’s net interest margin (NIM) and net interest income (NII) are expected to have been hurt in the third quarter. Management anticipates NIM to be flat sequentially.

The consensus estimate for NII for the to-be-reported quarter of $3.31 billion indicates a 4.1% decline sequentially.

Other Key Estimates for Q3

Non-interest Income: The consensus estimate for insurance commission is pegged at $513 million, indicating a fall of 11.7% sequentially. The consensus mark for income from bank-owned life insurance is $45 million, suggesting no change from the previous quarter’s reported number.

The Zacks Consensus Estimate for service charges on deposits of $225 million suggests a rise of 11.4% from the prior quarter. However, the consensus estimate for operating lease income of $78 million indicates a decline of 6% from the previous quarter’s reported figure.

The consensus estimate for total non-interest income of $2.03 billion points to a 16.3% decline on a sequential basis.

Expenses: While the company has been witnessing a continued rise in overall expenses over the past several quarters because of investments in technology upgrades and merger integration, management anticipates core non-interest expenses (excluding merger costs and amortization) for the to-be-reported quarter to be down

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