**MNI 5 THINGS: US Sept CPI Below-Expected +0.1%,Core +0.1%>

--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 

Statistics Thursday: 

     - 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 ** 

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