Today's Scoop:

Hey friends, check out the other recommendations from Beehiiv below. Each signup supports us, and the content is good.

Here’s what you need to know today…

1. Businesses are facing less inflation, but rising gas prices are painful.

2. Policymakers don’t expect to make borrowing cheaper anytime soon.

3. The US economy is doing better than expected overall.

S&P 500: 4,376.95
1Mo: -2% | 1Yr: +22% | 5Yr: +58%

The market continued the positive momentum today despite an unwelcome report about continued inflation for businesses.

Businesses are facing less inflation, but rising gas prices are painful. The Labor Department reported a 0.5% increase in the Producer Price Index for September. [🤓] That’s lower than July and August but still higher than policymakers would hope for. Gasoline prices surged 5.4% in the month, accounting for more than 40% of the inflation in goods prices. When stripping out volatile food and energy prices, the core PPI rose only 0.2%, which is a much more normal pace. We’ll hear about inflation for consumers tomorrow.

Policymakers don't expect to make borrowing easier anytime soon. Newly released minutes from the Federal Reserve’s last meeting revealed a split across committee members as to whether they want to keep raising interest rates to make borrowing more expensive and slow the economy to fight inflation. Since the last meeting, long-term interest rates that affect mortgages and other corporate borrowing have become much more costly, prompting several committee members to publicly comment that rates are already restrictive enough. Even if rates don’t go higher from here, the minutes and recent committee member comments have made clear that policymakers don’t expect to reduce interest rates anytime soon.

The US economy is doing better than most projected. The International Monetary Fund (IMF) raised its projection for US economic growth for 2023 by 0.3 percentage points to 2.1% and hiked next year's forecast by 0.5 percentage points to 1.5%. Businesses have kept investing more than expected, and consumer spending has been surprisingly resilient. The IMF still expects that the best is behind us for now, as Americans face slower wage growth, difficult borrowing conditions, less hiring, and declining savings.

Click to dig in & vote your reaction, see how others feel

• BP says it’s still committed to reducing oil output

• Walgreens gets a new CEO to handle its messy healthcare expansion

• General Motors ends one union worker strike

• Tyson cuts chicken production to prop up prices and profits

• Walmart faces billions in antitrust fines in Mexico 

(These links only work for 24 hours while the story is live.)

What is the Producer Price Index (PPI)?

The Producer Price Index (PPI) is another important indicator for economists tracking inflation. Inflation is the rate at which things get more expensive.

Unlike the Consumer Price Index (CPI), which looks at a set basket of stuff your average consumer spends money on and tracks how much it costs each month, the PPI tracks the prices of wholesale goods - like how much Ford pays for the tires it installs in its cars before selling them to you. The rate of change in those prices is inflation.

Prices rarely decline. Inflation, aka rising prices, is only a problem when it's really fast (3%+ per year).

Use our vetted resources to level up your financial wellness. View & compare more tools.

Hidden Opportunities: Volatile markets are a good time to hunt for new investments if you have extra savings. Find new companies, then follow their scoops. We’ve found a lot of interesting picks from Motley Fool, and it’s all written in digestible language for any experience level.

Right now, Motley Fool’s offering their bundle of stock research for $300 off. We’ve hesitated on the pricing before but found these bundles pay for themselves in our portfolio. Learn more and get $300 off here.