U.S. CPI Continues Slow, but Steady Rise in September

The Consumer Price Index increased 0.2% during September, the same as during each of the prior two months. The gain compared to expectations for a 0.1% uptick expected in the Action Economics Forecast Survey. The y/y increase eased to 2.4% from 2.5% in August and remained below the peak 9.1% y/y increase in June of 2022. The three-month increase rose to 2.1% (AR) from 1.1% but remained below the 4.6% April high this year. Prices excluding food & energy rose 0.3% for the second consecutive month. A 0.2% rise had been expected. Core consumer prices increased 3.1% (AR) during the last three months (3.3% y/y), up from 1.6% in July. Food prices rose 0.4% last month (2.3% y/y) while energy prices declined 1.9% (-6.8% y/y).

The CPI less food, energy and shelter, another measure of core pricing power, rose 0.4% after a 0.1% uptick and three months of no change. The 2.1% y/y rise remained below the 7.6% y/y peak in February 2022 and compared to a low of 0.3% y/y in May 2020.

Services costs less energy rose 0.4% in September (4.7% y/y) for the second consecutive month, up from a 0.1% rise in June. Shelter costs rose 0.2% (4.9% y/y) following a 0.5% rise in August. Owners’ equivalent rent of primary residences increased 0.3% (5.2% y/y), following a 0.5% rise. Rents of primary residences moved 0.3% higher (4.8% y/y) after a 0.4% gain while the cost of lodging away from home declined 1.9% (-2.8% y/y) and reversed a 1.8% August rise. Transportation service prices jumped 1.4% last month (8.5% y/y) following a 0.9% rise in August, led by public transportation prices which increased 2.4% (0.6% y/y) following a 2.5% rise. Medical care service costs ratcheted up 0.7% (3.6% y/y) after easing 0.1%. Education & communication prices rose 0.1% (2.3% y/y) following two straight 0.2% increases. Recreation services prices declined 0.5% (+2.2% y/y) after holding steady in August.

During September, the CPI for goods less food & energy increased 0.2% (-1.0% y/y) after falling 0.2% in August. The index has fallen or held steady in all but one month during the last year. Transportation product prices rose 0.3% (-2.3% y/y) after falling in each of the prior six months. New vehicle prices rose 0.2% (-1.3% y/y) after holding steady while used car & truck prices increased 0.3% (-5.1% y/y) after falling for three straight months. Prices for recreation products weakened 0.3% (-1.5% y/y), about as they did in both of the prior two months. To the upside, apparel costs surged 1.1% (1.8% y/y) after rising 0.3% in August. Home furnishings prices held steady (-2.2% y/y) last month after declining 0.3% in August, but appliance costs fell 0.6% (-2.6% y/y) after holding steady in August. Education & communication product costs fell 0.7% (-6.9% y/y) after falling 0.4% while medical care product prices declined 0.7% (NSA, +1.6% y/y) in September after a 0.2% decline.

Food prices rose 0.4% (2.3% y/y) in September following a 0.1% increase. Egg prices jumped 8.4% (39.6% y/y), the fourth straight month of strong increase. Meat, poultry & fish prices rose 0.2% (1.5% y/y) after rising 0.5% while cereal & bakery product prices advanced 0.3% (0.1% y/y). Fruit & vegetable prices rebounded 0.9% (0.7% y/y) after falling 0.2%, while dairy prices edged 0.1% higher (0.5% y/y) after rising 0.6% in August. Nonalcoholic beverage prices held steady (+1.3% y/y) after falling 0.7% in August.

Energy prices declined 1.9% (-6.8% y/y) in September after falling 0.8% in August. Gasoline prices fell 4.1% (-15.3% y/y) after a 0.6% decline. Amongst other energy products, fuel oil prices weakened 6.0% (-22.4% y/y) after declining 1.9%. Electricity prices rose 0.7% (3.7% y/y) and reversed August’s decline, while natural gas prices improved 0.7% (2.0% y/y) after falling 1.9% in August.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

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