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Economy in Brief

U.S. Consumer Price Inflation Moves Higher in September
by Tom Moeller  October 13, 2021

• Annual increase remains highest since mid-2008.

• Core inflation stays surprisingly tame.

• Food & energy prices remain strong.

The Consumer Price Index rose 0.4% (5.4% y/y) during September after increasing an unrevised 0.3% in August. A 0.3% rise had been expected in the Action Economics Forecast Survey. The CPI excluding food & energy increased 0.2% (4.0% y/y) last month. A 0.3% gain had been expected.

During the last six months, the CPI rose at a 7.2% annual rate. The 6.6% (AR) surge in the core CPI over six months compared to 1.8% twelve months ago.

Services prices rose 0.2% last month (2.9% y/y) following no change in August. Shelter prices increased 0.4% (3.2% y/y) after rising 0.2%. Owners' equivalent rent of primary residences improved 0.4% (2.9% y/y) following four straight months of 0.3% gain. Rents of primary residences gained 0.5% (2.4% y/y) last month after 0.3% in August, but the cost of lodging away from home fell 0.6% (+17.5% y/y), down for the second straight month. Recreation services prices also rose 0.4% in September (3.5% y/y) following a 0.2% August rise. Education & communication costs improved 0.4% last month (1.7% y/y), the strongest increase since July 2020. To the downside, medical care services eased 0.1% (+0.9% y/y) after two straight 0.3% gains. Transportation services prices fell 0.5% in September (+4.4 % y/y), the third straight monthly decline, as public transportation costs weakened 5.0% (+1.6% y/y), about as they did in August. Education & communication services prices rose 0.4% last month (1.7% y/y) after a 0.2% increase.

Goods price inflation excluding food & energy moderated to 0.2% in September (+7.3% y/y), the smallest increase since March. Household furnishings prices gained 1.3% (4.8% y/y), about as they did in August. Prices of appliances strengthened 1.2% (7.1% y/y) after rising 1.5% in August. Used vehicle prices fell 0.7% in September (+24.4% y/y) after falling 1.5% in August but new vehicle prices rose 1.3% (8.7% y/y), the sixth straight month of strong increase. Medical care product prices rose 0.3% (NSA) and fell 1.6% y/y. Education & communication product costs rose 0.6% last month (2.6% y/y) after easing 0.1% in August. Recreation product prices eased 0.2% in September (3.5% y/y) following a 1.0% rise. Apparel prices declined 1.1% (3.4% y/y) following a 0.4% August increase.

Energy prices surged 1.3% in September (24.8% y/y), the fourth straight month of strong increase. Gasoline prices rose 1.2% last month (42.1% y/y) after strong gains during the prior three months. Fuel oil & other fuels prices rose 3.1% (36.0% y/y) after rising 0.5% in August. Natural gas prices surged 2.7% (20.6% y/y), strong for the eighth straight month, while the cost of electricity rose 0.8% last month (5.2% y/y) following a 1.0% August rise.

Food price inflation accelerated to 0.9% (4.6% y/y) last month, the strongest increase since April 2020. Food-at-home prices also rose 1.2% and by a strengthened 4.5% y/y. Meat, poultry & fish prices rose 2.2% (10.4% y/y) following a 0.6% increase, while egg prices increased 1.1% (12.6% y/y). Dairy prices rebounded 0.7% (0.6% y/y) after declining 1.0% in August. Cereal & bakery product costs strengthened 1.1% (2.7% y/y) after holding steady in August. Fruit & vegetable prices gained 0.6% (3.0% y/y) in September after rising 0.2%. Nonalcoholic beverage prices strengthened 1.2% (3.7% y/y) after three months of firm gain. Prices for food away-from-home rose 0.5% (NSA) in September. The 4.7% y/y increase has jumped from 2.1% in the middle of 2017.

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.

Consumer Price Index, All Urban Consumers (% chg) Sep Aug Jul Sep Y/Y 2020 2019 2018
Total 0.4 0.3 0.5 5.4 1.2 1.8 2.4
Total less Food & Energy 0.2 0.1 0.3 4.0 1.7 2.2 2.1
  Goods less Food & Energy 0.2 0.3 0.5 7.3 0.1 0.2 -0.2
  Services less Energy 0.2 0.0 0.3 2.9 2.2 2.8 2.9
 Food 0.9 0.4 0.7 4.6 3.4 1.9 1.4
 Energy 1.3 2.0 1.6 24.8 -8.5 -2.1 7.5
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