US Inflation Rises 2.2% on Annual Basis as Gas Prices Surge in September

The cost of living in the United States increased the most in eight months in September and the annual rate of inflation climbed the highest since April, according to a report released by the Labor Department on Friday, October 13, 2017.

Taking away soaring gasoline prices, however, pricing gains overall were rather muted. They mostly eased from the previous month.

Consumer prices advanced 0.5% in September after rising 0.4% in August, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from vegetables to vehicles.

Gasoline prices soared 13.1% after jumping 6.3% previously. Before then, prices at the pump had fallen or were muted for three straight months. They are 19.3% higher than a year ago.

"The gasoline index increased 13.1 percent in September and accounted for about three-fourths of the seasonally adjusted all items increase," the Labor Department’s report said.

Hurricane Harvey played a role in the increase, analysts noted. More recently, consumers are catching a bit of a break. Regular gasoline averaged $2.481 a gallon on Friday, according to AAA, compared to readings of $2.656 per gallon one month earlier and $2.253 per gallon one year earlier.

The broader index for energy, which combines items like gasoline, electricity and fuel oil, surged 6.1% in September after moving up 2.8% in August. They are 10.1% higher than a year ago.

Food prices rose 0.1% for a second month in a row and their eighth increase in nine months. They climbed 1.2% from a year earlier.

Stripping the more volatile food and energy components, so-called core consumer prices rose 0.1% in September after increasing 0.2% in August.

Within the grouping, shelter or housing costs rose 0.3% after advancing 0.5% for the biggest monthly increase since 2005. They are 3.2% higher over the past 12 months. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels, and housing at schools. The shelter component accounts for about one-third of the CPI.

"The shelter index continued to increase, and the indexes for motor vehicle insurance, recreation, education, and wireless telephone services also rose," the report described. "These increases more than offset declines in the indexes for new vehicles, household furnishings and operations, medical care, and used cars and trucks."

U.S. inflation picked up 2.2% from the same month a year earlier after climbing 1.9% previously. As recently as February, the annual rate of inflation surged 2.7% for the largest gain since March 2012.

Core inflation rose 1.7% on an annual basis for the fifth month in a row. It has remained in the range of 1.6% to 2.3% since June 2011, the Labor Department noted. The core annual measure is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

"This report likely won’t change anyone’s mind about the inflation outlook a year from now, and it won’t stop the Fed hiking in December," MarketWatch quoted Ian Shepherdson of Pantheon Economics.

The following table of key inflation figures is for the last nine months through September, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on October 13, 2017. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

March to September 2017 Consumer Prices – Gains & Losses in Percent

  Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Sept 2017 12 Month
All items -0.3 0.2 -0.1 .0 0.1 0.4 0.5 2.2
  Food 0.3 0.2 0.2 .0 0.2 0.1 0.1 1.2
    Food at home 0.5 0.2 0.1 -0.1 0.2 -0.2 .0 0.4
    Food away from home 0.2 0.2 0.2 .0 0.2 0.3 0.3 2.4
  Energy -3.2 1.1 -2.7 -1.6 -0.1 2.8 6.1 10.1
    Energy commodities -6.0 1.3 -6.2 -2.7 .0 6.1 12.6 18.9
      Gasoline (all types) -6.2 1.2 -6.4 -2.8 .0 6.3 13.1 19.3
      Fuel oil -0.8 -0.3 -2.8 -3.7 -2.0 2.9 8.2 15.6
    Energy services -0.3 0.9 0.7 -0.5 -0.2 -0.1 -0.2 2.2
      Electricity -0.1 0.6 0.3 -0.6 0.4 .0 .0 1.7
      Utility (piped) gas service -0.8 2.2 1.9 -0.2 -2.3 -0.5 -0.8 3.8
  All items less food, energy -0.1 0.1 0.1 0.1 0.1 0.2 0.1 1.7
    Commodities less food, energy -0.3 -0.2 -0.3 -0.1 -0.1 -0.1 -0.2 -1.0
      New vehicles -0.3 -0.2 -0.2 -0.3 -0.5 .0 -0.4 -1.0
      Used cars and trucks -0.9 -0.5 -0.2 -0.7 -0.5 -0.2 -0.2 -3.7
      Apparel -0.7 -0.3 -0.8 -0.1 0.3 0.1 -0.1 -0.2
      Medical care 0.2 -0.8 0.4 0.7 1.0 -0.1 -0.8 1.0
    Services less energy -0.1 0.1 0.2 0.2 0.2 0.4 0.2 2.6
      Shelter 0.1 0.3 0.2 0.2 0.1 0.5 0.3 3.2
      Transportation 0.4 -0.2 0.3 0.2 0.2 0.4 0.3 3.9
      Medical care 0.1 .0 -0.1 0.3 0.3 0.2 0.1 1.7

 

The BLS releases inflation data around the middle of every month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for October and the latest annual period becomes public on November 15, 2017.

CPI data is used in calculating inflation rates and in this site’s inflation calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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