The Consumer Price Index declined 0.2% during September (-0.0% y/y) and followed a 0.1% August dip. Pricing power elsewhere, however, strengthened. Prices excluding food & energy increased 0.2% (1.9% y/y) following two months of 0.1% gain. A 0.2% decline in the total and a 0.1% rise in core prices were expected in the Action Economics Forecast Survey.

A 4.7% fall (-18.4% y/y) in energy prices was behind last month's decline in the total CPI. The easing was paced by a 9.0% drop in gasoline prices (-29.6% y/y) which followed a 4.1% shortfall in August. Fuel oil prices were off 2.4% (-34.9% y/y). Electricity prices fell 0.5% (-0.4% y/y) and natural gas prices eased 0.3% (-12.1% y/y).

Offsetting this decline was a 0.4% increase (1.6% y/y) in food prices which followed two months of 0.2% gain. Fruit & vegetable prices rose 0.7% both m/m and y/y. Nonalcoholic beverage pries eased 0.1% (+1.2% y/y) and meats, poultry & fish costs fell 0.3% (0.9% y/y). Egg prices were off 0.6% m/m but were up by more than one third y/y.

Services prices less energy rose 0.3% (2.7% y/y) in September, equaling the strongest increases this year. Shelter prices gained 0.3% (3.2% y/y). Rents of primary residences rose 0.4% (3.7% y/y) and owners equivalent rents of primary residences increased 0.3% (3.1% y/y). Also rising 0.3% were tuition & school fees (3.8% y/y) and medical care services (2.4% y/y) prices.

Prices for goods less food & energy remained unchanged (-0.5% y/y) after dipping 0.1% for four straight months. Household furnishings & supplies prices rose 0.4% (-1.0% y/y) and recreation goods improved 0.3% (-2.5% y/y). These increases were offset by a 0.3% drop (-1.4% y/y) in apparel prices; new vehicle prices eased 0.1% (+0.5% y/y), down for the third straight month.

Declining prices helped prop up real average hourly earnings by 2.2% y/y.

The consumer price data is available in Haver's USECON database while detailed figures can be found in CPIDATA. The expectations figure is from Action Economics and is found in the AS1REPNA database.

Why So Slow? A Gradual Return for Interest Rates from the Federal Reserve Bank of San Francisco is available here.