US Inflation Rises as Gasoline Lifts Consumer Prices in September 2012

US inflation advanced in September for a second month as higher energy costs again lifted consumer prices, newly released data from the US government shows.

Consumer prices climbed 0.6 percent in September, matching the level in August that had registered as the biggest advance since mid-2009. Gains were led by higher fuel with the month’s sharpest increase of 7% tagged to gasoline prices. They are 6.8% higher than a year ago.

"For the second month in a row, the substantial increase in the all items index was mostly the result of an increase in the gasoline index, which rose 7.0 percent in September after increasing 9.0 percent in August. The other major energy indexes increased in September as well," the US Labor Department reported Tuesday, October 16, in its monthly Consumer Price Index (CPI) report.

Food prices continued higher by 0.1%, but the rate was slower than the previous month’s 0.2% pick-up. While dairy and beverage prices went up in September, meats, poultry, fish, and eggs fell 0.6% compared to the prior month when they went up 0.4%. After surging 1.9% in August, the cost of fresh fruits dropped 0.9%. Still, food prices over the past year have jumped 1.6%.

Higher food and gas prices take money from American consumers that would normally get spent elsewhere. When excluding these volatile categories that can deflate the economy, core US inflation rose 0.1 percent in September for a third month in a row.

"There isn’t any meaningful risk of short-term core inflation," Bloomberg quoted Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who correctly forecast the gain in core prices. "When it comes to everyday goods and services, the lack of demand just isn’t going to push prices higher."

In addition to more expensive food and gasoline, US consumers paid 2.0% more for shelter in September, a repeat of the August increase. Other advancing items included medical care (+0.3%), hospital services (+0.6%), airline fares (+1.4%) clothing (+0.3%) and tobacco (+0.2%). Major items to fall were new cars (-0.1%) and used cars (-1.4%) — the latter tumbling the most since February 2009 as dealers discounted to move newer models.

US inflation jumped 2.0 percent over the past 12 months, up from 1.7 percent in August.

Core US inflation also advanced 2.0 percent for the year through September compared with 1.9% for the year through August. The core US inflation rate is closely watched by the Federal Reserve as it helps determine where the central bank sets its key interest rate. The level is right at the Fed’s target of 2.0%.

"Core inflation was low and unthreatening (in September), but in truth neither matters to a Fed monetary policy committed to lowering unemployment," Reuters quoted Joseph Trevisani, a market strategist at Worldwide Markets in Woodcliff Lake, New Jersey.

Within the grid below is monthly US Labor Department inflation data from March through September and the 12-month period.

March – September 2012 Consumer Prices – Gains in Percent

  Mar
2012
Apr
2012
May
2012
June 2012 July 2012 Aug 2012 Sept 2012 12
Month
All items 0.3 .0 -0.3 .0 .0 0.6 0.6 2.0
  Food 0.2 0.2 .0 0.2 0.1 0.2 0.1 1.6
    Food at home 0.1 0.2 -0.1 0.1 .0 0.1 .0 0.8
    Food away from home 0.2 0.3 0.2 0.2 0.2 0.3 0.2 2.8
  Energy 0.9 -1.7 -4.3 -1.4 -0.3 5.6 4.5 2.3
    Energy commodities 1.7 -2.6 -6.4 -2.3 0.2 8.6 6.7 6.4
      Gasoline (all types) 1.7 -2.6 -6.8 -2.0 0.3 9.0 7.0 6.8
      Fuel oil 2.7 -1.1 -2.8 -7.9 -0.5 4.6 4.1 4.0
    Energy services -0.4 -0.2 -0.7 .0 -1.1 0.8 0.7 -3.8
      Electricity -0.8 0.2 0.3 -0.5 -1.3 0.2 0.2 -1.5
      Utility (piped) gas service 0.9 -1.8 -4.1 1.7 -0.2 2.8 2.0 -10.7
  All items less food, energy 0.2 0.2 0.2 0.2 0.1 0.1 0.1 2.0
    Comm. less food, energy 0.2 0.2 0.2 0.2 .0 -0.2 -0.2 0.7
      New vehicles 0.2 0.4 0.2 0.2 -0.1 0.2 -0.1 1.0
      Used cars and trucks 1.3 1.5 1.0 .0 -0.5 -0.9 -1.4 -1.6
      Apparel 0.5 0.4 0.4 0.5 0.2 -0.5 0.3 2.7
      Medical care 0.4 .0 .0 0.1 0.5 0.3 -0.1 3.3
    Services less energy 0.2 0.3 0.2 0.2 0.1 0.1 0.3 2.5
      Shelter 0.2 0.2 0.2 0.1 0.1 0.2 0.2 2.2
      Transportation 0.3 0.5 0.3 -0.2 -0.2 .0 0.5 1.5
      Medical care 0.3 0.4 0.5 0.7 0.3 0.2 0.4 4.4

 

The Consumer Price Index for October 2012 will be available from the US Labor Department on November 15, 2012 at 8:30 AM ET. CPI information is used as the core data for this site’s US Inflation Calculator.

Leave a Reply