U.S. CPI Marches Higher in September
by:Tom Moeller
|in:Economy in Brief
Summary
- Y/Y increase is largest in 40 years.
- Core prices remain firm.
- Food prices continue strong; energy costs decline.
The inflation environment is hot. Consumer prices rose 0.4% during September (8.2% y/y) after a 0.1% August rise and stability in July. These readings are below the 1.0% and 1.3% increases logged in May and June, when energy prices were rising. A 0.2% September rise had been expected in the Action Economics Forecast Survey. Prices excluding food and energy strengthened 0.6% in September, the same as in August. The 6.6% y/y gain remained nearly the highest since August 1982. A 0.5% September increase had been expected.
Food prices increased 0.8% (11.2% y/y) for the second consecutive month. Fruit & vegetable prices jumped 1.6% (10.4% y/y) while cereal & bakery product prices strengthened 0.9 % (16.2% y/y). Meat, poultry & fish prices increased 0.7% (7.7% y/y) while the cost of dairy products moved up 0.3% (15.9% y/y). Egg prices declined 3.5% (+30.5% y/y) while nonalcoholic beverage costs increased 0.6% (12.9% y/y).
Offsetting this strength was a 2.1% decline (+19.8% y/y) in energy prices. Gasoline prices fell 4.9% (+18.2% y/y), down sharply for a third straight month, while the cost of fuel oil weakened 2.7% (NSA, +58.1% y/y), off for the fourth consecutive month. Offsetting these declines, natural gas price strengthened 2.9%, up one-third y/y. Electricity prices rose 0.4% and by 15.5% y/y.
Services prices less energy surged 0.8% (6.7% y/y), the strongest monthly gain since August 1990. Transportation services prices jumped 1.9% (14.6% y/y). Medical care services prices rose 1.0% (6.5% y/y), the biggest monthly increase since February, 1984. Medical care service costs rose 1.0% (11.3% y/y), the largest gain since November 1982. Shelter costs increased 0.7% (6.6% y/y) for a second consecutive month, as the owners' equivalent rent of primary residences gained 0.8% (6.7% y/y). Rental costs increased 0.8% (6.7% y/y) but prices for lodging away from home fell 1.0% (+2.9% y/y). Education & communication costs rose 0.2% (1.4% y/y) while recreation service prices also gained 0.2% (4.1% y/y).
Goods prices less food & energy held steady (+6.6% y/y) after advancing 0.5% in August. Household furnishings prices strengthened 0.6% (9.9% y/y) but appliance costs eased 0.3% (+1.7% y/y), off for the third straight month. New vehicle prices increased 0.7% (9.4% y/y) and recreation product prices eased slightly (+4.0% y/y). Medical care product prices eased 0.1% (+3.7 y/y) while apparel prices fell 0.3% (+5.5% y/y).
The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.
What Is the Impact of Monetary Policy on Households' Desired Labor Supply? from the Federal Reserve Bank of Chicago is available here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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