Core CPI, which doesn’t include energy and food prices, rose to 4.1% on a 12-month basis, hitting economists estimates. Headline inflation jumped 0.6% in August.
Consumer Price Index (CPI) stayed high in September according to new data released by the US Bureau of Labour Statistics (BLS). There was a decline in used car prices, while rent enjoyed steady gain.
CPI soared 0.4%
Prices of goods and services rose at a faster-than-expected pace in September, holding steady at 3.7%. This came in slightly higher than market expectation at 3.6%.
Core CPI, which doesn’t include energy and food prices, rose to 4.1% on a 12-month basis, hitting economists estimates. Headline inflation jumped 0.6% in August.
This month, shelter costs were the main factor in the inflation increase. The index, which took about one-third of the weighting, surged 0.6% for the month. According to the BLS, shelter was responsible for more than half the rise in the CPI.
“The index for shelter was the largest contributor to the monthly all items increase, accounting for over half of the increase,” the BLS noted in its press release. “An increase in the gasoline index was also a major contributor to the all items monthly rise.”
Food was up 0.2% for the third month in a row. Gas prices rose 2.1%, as energy cost moved up 1.5%.
Read more: CPI rose by almost four percent in August but it wasn’t all that bad
The Fed takes a dovish outlook
Inflation has since halted increase after it hit a 40-year high in June 2022. The rate witnessed a 3% drop in the first half of the year. However, since the first half, the prices of goods have surged quickly or slowed down conservatively.
A future increase in inflation may add to short-term volatility and the outlook, but it is unlikely to have a long-term or medium-term influence because more data will be required. The data release does support the Fed’s rhetoric about keeping rates higher for longer, but it does not alter the Fed’s outlook for additional tightening just yet.
Fed Open Market Committee differences were evident in the minutes from the September meeting, which were made public on Wednesday. The committee decided against raising interest rates as the meeting came to a close, but the summary revealed that inflation concerns and concerns about potential upside risks persisted.
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