Annual U.S. Inflation Rises 8.2% in September; Core Rate Marks 40-Year High

American consumers paid more than expected for goods and services in September. And again, underlying inflation ran the quickest in 40 years, according to U.S. government report released Thursday, Oct. 13.

Compared to a month earlier, gasoline prices dipped but the cost of food remained stubbornly high. Pricing hikes for both slowed some from the year-over-year levels reported in August. Shelter costs, however, soared for the month and from a year ago.

In the headline monthly figure, U.S. consumer prices increased 0.4% in September after rising 0.1% in August, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from coffee to cars. The figure compares to reported estimates for a 0.2% to 0.3% increase.

Overall food prices increased 0.8% for a second month in a row following seven straight monthly advances of 0.9% or more. For the month, groceries went up 0.7% while the cost of eating at restaurants and the like climbed 0.9%.

Food inflation jumped 11.2% year-over-year compared to 11.4% previously (the most pace since April 1979). Meanwhile, over the same period grocery prices surged 13% against 13.5% previously (the most since March 1979). Prices for foods consumed outside of the home rose 8.5% from 8%.

Prices at the pump fell 4.9% in September after dropping 10.6% in August, slimming their year-on-year increase to 18.2%. This year’s high-water mark happened in the 12 months ending June when gasoline inflation at 59.9% was the highest since March 1980.

The broader index for energy, which combines items like gasoline, electricity, and fuel oil, declined 2.1% for the month after sliding 5% previously. Energy costs rose 19.8% from a year earlier.

Excluding the more volatile food and energy components, the rate of core consumer prices rose 0.6% in September, matching their prior gain and against an expected increase of around 0.4% from economists.

Shelter or housing prices increased 0.7% for a second consecutive month. They soared 6.6% year-over-year for their biggest 12-month increase since August 1982.

Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. This index accounts for about one-third of the entire CPI.

Airline fares increased 0.8% last month following a decline of 4.6% in August. Earlier, they posted monthly increases as high as 12.6% in May and 18.6% in April, which was the largest 1-month gain since the inception of the series in 1963. They are 42.9% higher year-over-year.

Clothing prices declined 0.3% in September after rising 0.2, and they increased 5.5% from a year earlier.

New vehicle prices rose 0.7%, for their seventeenth increase in eighteen months, after rising 0.8% previously. They advanced 9.4% from a year ago.

Also, for the month, used car and truck prices fell 1.1% after dipping 0.1% in August. Still, they are 7.2% higher compared to a year earlier.

In the headline annual figure, inflation rose 8.2% over the past 12 months against 8.3% previously. This year’s high-water mark happened in the 12-months ending July at 9.1%, which was quickest rate of inflation since November 1981. Annual inflation rates have now topped 6% for twelve straight months, and they have been at or above 7% for ten months in a row.

Meanwhile, core inflation advanced 6.6% over the past year compared to 6.3% previously. For a second straight instance, the annual core rate ranks the quickest since August 1982. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it guides the central bank when setting its key interest rate.

"After today’s inflation report, there can’t be anyone left in the market who believes the Fed can raise rates by anything less than 75 basis points at the November meeting," MarketWatch quoted Seema Shah, chief global strategist at Principal Asset Management.

"Inflation has built up a lot of momentum over the last year," The Wall Street Journal quoted Bill Adams, chief economist at Comerica Bank. "That’s going to keep inflation higher than the Federal Reserve wants it for at least a couple more months — if not a couple more quarters."

The following table of key inflation figures is for the last seven months through September, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Oct. 13, 2022. 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 2022 to September 2022 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted)

  March 2022 April 2022 May 2022 June 2022 July 2022 Aug 2022 Sept 2022 12 Month
All items 1.2 0.3 1.0 1.3 .0 0.1 0.4 8.2
  Food 1.0 0.9 1.2 1.0 1.1 0.8 0.8 11.2
    Food at home 1.5 1.0 1.4 1.0 1.3 0.7 0.7 13.0
    Food away from home 0.3 0.6 0.7 0.9 0.7 0.9 0.9 8.5
  Energy 11.0 -2.7 3.9 7.5 -4.6 -5.0 -2.1 19.8
    Energy commodities 18.1 -5.4 4.5 10.4 -7.6 -10.1 -4.7 19.7
      Gasoline (all types) 18.3 -6.1 4.1 11.2 -7.7 -10.6 -4.9 18.2
      Fuel oil 22.3 2.7 16.9 -1.2 -11.0 -5.9 -2.7 58.1
    Energy services 1.8 1.3 3.0 3.5 0.1 2.1 1.1 19.8
      Electricity 2.2 0.7 1.3 1.7 1.6 1.5 0.4 15.5
      Utility (piped) gas service 0.6 3.1 8.0 8.2 -3.6 3.5 2.9 33.1
  All items less food, energy 0.3 0.6 0.6 0.7 0.3 0.6 0.6 6.6
    Commodities less food, energy -0.4 0.2 0.7 0.8 0.2 0.5 0.0 6.6
      New vehicles 0.2 1.1 1.0 0.7 0.6 0.8 0.7 9.4
      Used cars and trucks -3.8 -0.4 1.8 1.6 -0.4 -0.1 -1.1 7.2
      Apparel 0.6 -0.8 0.7 0.8 -0.1 0.2 -0.3 5.5
      Medical care 0.2 0.1 0.3 0.4 0.6 0.2 -0.1 3.7
    Services less energy 0.6 0.7 0.6 0.7 0.4 0.6 0.8 6.7
      Shelter 0.5 0.5 0.6 0.6 0.5 0.7 0.7 6.6
      Transportation 2.0 3.1 1.3 2.1 -0.5 0.5 1.9 14.6
      Medical care 0.6 0.5 0.4 0.7 0.4 0.8 1.0 6.5

 

The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for October and the latest annual period become public on Nov. 10, 2022.

CPI data is used in calculating inflation rates and in this site’s U.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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