U.S. Annual Inflation Sticks at 1.7%; Consumer Prices Flat in September

U.S. inflation was checked in September as increased costs for shelter and food were offset by cheaper energy, vehicles and clothing prices, a government report showed Thursday, Oct. 10.

 

And for a fourth straight time at the annual level, energy prices declined and food prices increased.

U.S. consumer prices were unchanged 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 American consumers pay for everything from eggs to energy.

In key pricing categories:

  • Prices at the pump declined 2.4% for the month after falling 3.5% in August. Gasoline prices tumbled 8.2% from a year ago — the largest fall since February. The broader index for energy, which combines items like gasoline, electricity and fuel oil, fell 1.4% in September after sliding 1.9% previously. Energy prices registered 4.8% lower year-over-year.

  • Overall prices for food edged up 0.1% after three straight months of coming in flat. Food prices increased 1.8% year-over-year.

Excluding the more volatile food and energy components, so-called core consumer prices picked up 0.1% in September after three consecutive 0.3% increases.

Shelter or housing costs climbed 0.3% for the month after rising 0.2% in August, while their year-over-year pace grew 3.5% from 3.4%. 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. The index accounts for about one-third of the entire CPI.

"Along with the shelter index, the indexes for medical care, household furnishings and operations, and motor vehicle insurance all rose in September," the Labor Department’s monthly report stated.

Used car and truck prices dropped 1.6% after advancing 1.1%; new vehicle prices declined 0.1% for a second month in a row; and clothing prices fell 0.4% after increasing 0.2%.

In the headline annual figure, U.S. inflation for the past 12 months ending September climbed 1.7%, matching its previous increase. The 12-month inflation rate has remained within the range of 1.5% to 2% since the period ending December 2018. For the year so far, April’s level at 2% was the highest while February’s mark of 1.5% was the lowest as well as the weakest since September 2016.

Core inflation rose 2.4% over the last 12 months — the same as in the annual period ended August, which was the largest core rate since July 2018. This "all items less food and energy" index 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.

"The overall inflation picture remains roughly consistent with the Fed’s target and looks to be staying there," Bloomberg News quoted Sarah House, senior economist at Wells Fargo & Co. "It definitely takes away some of the ammunition of the hawks that were looking for more evidence of a slowdown and also just balancing the two sides of the mandate, but I think in general the Fed hasn’t been terribly concerned about the upside trend in inflation recently."

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. 10, 2019. 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 2019 Consumer Prices – Gains & Losses in Percent

  Mar 2019 Apr 2019 May 2019 June 2019 July 2019 Aug 2019 Sept 2019 12 Month
All items 0.4 0.3 0.1 0.1 0.3 0.1 .0 1.7
  Food 0.3 -0.1 0.3 .0 .0 .0 0.1 1.8
    Food at home 0.4 -0.5 0.3 -0.2 -0.1 -0.2 .0 0.6
    Food away from home 0.2 0.3 0.2 0.3 0.2 0.2 0.3 3.2
  Energy 3.5 2.9 -0.6 -2.3 1.3 -1.9 -1.4 -4.8
    Energy commodities 6.2 5.4 -0.4 -3.5 2.4 -3.3 -2.3 -8.2
      Gasoline (all types) 6.5 5.7 -0.5 -3.6 2.5 -3.5 -2.4 -8.2
      Fuel oil 2.1 1.3 -0.3 -2.3 0.6 -0.9 -0.8 -8.5
    Energy services 0.3 -0.1 -0.8 -0.7 .0 -0.2 -0.1 -0.1
      Electricity 0.4 .0 -0.8 -0.8 0.6 -0.3 .0 0.7
      Utility (piped) gas service -0.1 -0.8 -1.0 -0.3 -1.8 0.1 -0.7 -2.7
  All items less food, energy 0.1 0.1 0.1 0.3 0.3 0.3 0.1 2.4
    Commodities less food, energy -0.2 -0.3 -0.1 0.4 0.2 0.2 -0.3 0.7
      New vehicles 0.4 0.1 0.1 0.1 -0.2 -0.1 -0.1 0.1
      Used cars and trucks -0.4 -1.3 -1.4 1.6 0.9 1.1 -1.6 2.6
      Apparel -1.9 -0.8 .0 1.1 0.4 0.2 -0.4 -0.3
      Medical care 0.4 0.9 -0.4 -0.2 0.2 0.3 -0.6 -0.3
    Services less energy 0.3 0.3 0.2 0.3 0.3 0.3 0.3 2.9
      Shelter 0.4 0.4 0.2 0.3 0.3 0.2 0.3 3.5
      Transportation .0 0.1 0.1 .0 0.3 0.4 0.3 0.8
      Medical care 0.3 0.2 0.5 0.4 0.5 0.9 0.4 4.4

 

The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for October and the latest annual period become public on November 13, 2019.

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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