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--5 Things We Learned From The September CPI Data
By Kevin Kastner and Shikha Dave
WASHINGTON (MNI) - The following are the key points from the
Consumer Price Index data for September released by the Bureau of Labor
- September CPI rose 0.1% month/month overall, lower than the 0.2%
gain expected by both markets and analysts. Before rounding it was
+0.059%, on the low side of 0.1%. Core prices were also below
expectations with a 0.1% gain and a steady year/year rate, so the market
reaction should reflect relief that tariffs and Hurricane Florence did
not push up inflation.
- Core CPI was +0.116% unrounded, so on the high side of +0.1%,
with the major components mixed. The large owners' equivalent rents
category rose 0.2%, while apparel prices were up 0.9% and medical care
prices rose 0.2%. However, prices of new vehicles fell 0.1% and used
vehicles fell 3.0%.
- MNI analysis showed analysts have a tendency to overestimate core
CPI by a small margin, so today's release maintains that trend. The data
suggest a downside risk for core PCE prices when they are released later
in the month.
- The y/y rate for headline CPI fell sharply to 2.3% in September
vs 2.7% in August, while the y/y rate for core CPI stayed at 2.2%.
Overall, the data suggest steady inflation growth, keeping the FOMC on
its gradual rate hike path.
- Energy prices fell by 0.5% in September after a 1.9% surge in
August, with gasoline prices down 0.2%, electricity prices down 0.5% and
gas utilities prices down 1.7%. CPI excluding only energy was still up
0.1%, while food prices were flat.
** MNI Washington Bureau: 202-371-2121 **