MNI DATA ANALYSIS: US September CPI Rises 0.1%, Core Up 0.1%>

--Overall CPI Slows To +2.3% Y/Y, Core Unchanged At +2.2% Y/Y

--Initial Jobless Claims +7,000 To 214,000; Hurricane Impact Next Week

By Kevin Kastner and Shikha Dave

     WASHINGTON (MNI) - The CPI data suggest that consumer inflation 

rose only slightly in September, with the headline and core measures 

below expectations and the year/year rate for the overall measure 

falling from August, data released Thursday morning by the Bureau of 

Labor Statistics showed. 

     Overall CPI posted a 0.1% increase, below the 0.2% gain expected by 

both analysts and market participants, while the core CPI rose 0.1%, 

also below expectations. MNI analysis released Wednesday showed a 

tendency to overestimate core CPI, so this maintains that trend.

     Unrounded, the month/month rise for overall CPI was 0.059%, on the 

lower side of 0.1% increase, and the unrounded increase for core CPI was 

0.116%, on the upper side of a 0.1% increase. 

--CORE YEAR/YEAR PRICES UNCHANGED

     Overall, the data point to steady progress in consumer inflation, 

as the year/year rate for the overall fell while the core measure was 

unchanged. 

     The year/year rate for overall CPI slowed to 2.3% from 2.7%, while 

the year/year rate for core CPI was unchanged from 2.2% in August. This 

should calm some nerves that tariffs and Hurricane Florence lifted 

inflation in the month. 

--RENTS RISE, NEW VEHICLES PRICES FALL SLIGHTLY

     The large owners' equivalent rents category rose 0.2% and medical 

care prices rose 0.2%, while new vehicle prices were down 0.1% and used 

vehicles prices fell 3.0%. 

     Energy prices fell by 0.5% for September after a 1.9% rebound in 

August, with gasoline prices down 0.2%, fuel oil prices up 0.3%, 

electricity prices down 0.5%, and gas utilities prices down 1.7%. Energy 

prices were down 0.3% unadjusted. CPI excluding only energy was up 0.1%. 

     Food prices were flat in September, with food at home prices 

down 0.1% and food away from home prices up 0.2%. 

--INITIAL JOBLESS CLAIMS RISE

     In other data released on Thursday, the level of initial claims 

rose by 7,000 to 214,000 in the October 6 week after falling to 207,000 

in the previous week. 

     The four-week moving average rose by 2,500 to 209,500, and will 

likely rise further next week as the recent-low 202,000 level in the 

September 15 employment survey week rolls out of the equation. The 

impact of Hurricane Michael is likely to be much larger than that of 

Florence last month, so there is a large upside risk to claims for next 

week. 

     Continuing claims rose by 4,000 to 1.660 million in the September 

29 week, but the four-week moving average fell to 1.656 million, the 

lowest level since the August 18, 1973 week when it was 1.647m. 

     The recent claims levels are still evidence of a very tight labor 

market, however initial claims could be boosted in the coming weeks due 

to Hurricane Michael.  

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,MT$$$$,M$U$$$]