U.S. Inflation Resumes Quicker Pace in September

The pace of inflation accelerated in September as Americans paid more for food, rent, new vehicles and other items, government data released Wednesday, Oct. 13, shows.

Energy price increases tapered a tad over the month and from a year ago compared to the levels reported in August, but prices overall for food jumped by all measures.

"Today’s number, with food price inflation and shelter inflation moving higher, suggests growing pressure on consumers," Reuters quoted Seema Shah, chief strategist at Principal Global Investors. "Keep in mind too that the recent rise in oil prices hasn’t yet fed through to the numbers – that’s still to come, while the renewed rise in car prices is also likely to drive inflation numbers higher in the coming months."

In the headline monthly figure, U.S. consumer prices advanced 0.4% in September after rising 0.3% 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 clothing to cars. As recently as June, the 12-month level reached 0.9% for the biggest 1-month increase since June 2008.

"The indexes for food and shelter rose in September and together contributed more than half of the monthly all items seasonally adjusted increase," the Labor Department’s monthly report said.

In several key consumer pricing categories:

  • Gas price increases slowed in September to 1.2% from 2.8% in August. They surged 42.1% year-over-year.

  • The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 1.3% in the month compared to 2.0% previously. Energy prices soared 24.8% in the past 12 months.

  • Prices for food grew 0.9% from 0.4%. Food prices advanced 4.6% year-over-year.

Excluding the more volatile food and energy components, core consumer prices rose 0.2% in September after climbing 0.1% in August. Still, in contrast, both represent small gains compared to matching increases of 0.9% in April and June — the highest levels since April 1982.

"Along with the index for shelter, the indexes for new vehicles, household furnishings and operations, and motor vehicle insurance also rose in September. The indexes for airline fares, apparel, and used cars and trucks all declined over the month," the report noted.

Shelter or housing costs for the month picked up 0.4% from 0.2%, and they rose 3.2% from a year earlier. 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.

New vehicle prices advanced 1.3% from 1.2% previously and jumped 8.7% from a year earlier.

Airline fares dropped 6.4% over the month after sinking 9.1% in the prior month.

Used car and truck prices declined 0.7% in September after sliding 1.5% in August. August was their first monthly decline February. After February, they marked successive monthly increases of 0.5%; 10%; 7.3%; 10.5%; and 0.2%. Of note, they are 24.4% higher than a year ago.

Clothing prices fell 1.1% over the month after increasing 0.4% in the previous month, but they are up 3.4% from a year earlier.

In the headline annual figure, inflation in the United States rose 5.4% in the 12 months ended September against 5.3% previously. At 5.4% also in the annual periods ending June and July, the inflation rate is the highest since August 2008 when oil topped $150 a barrel.

Core inflation rose 4.0% over the past 12 months, and for a second straight time. Just in June, the 12-month core rate at 4.5% was the highest since November 1991. 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 helps the central bank decide where to set its key interest rate.

The following table of key inflation figures is for the last seven months through August, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on October 13, 2021. 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 2021 Consumer Prices – Gains & Losses in Percent

  March 2021 April 2021 May 2021 June 2021 July 2021 August 2021 September 2021 12 Month
All items 0.6 0.8 0.6 0.9 0.5 0.3 0.4 5.4
  Food 0.1 0.4 0.4 0.8 0.7 0.4 0.9 4.6
    Food at home 0.1 0.4 0.4 0.8 0.7 0.4 1.2 4.5
    Food away from home 0.1 0.3 0.6 0.7 0.8 0.4 0.5 4.7
  Energy 5.0 -0.1 .0 1.5 1.6 2.0 1.3 24.8
    Energy commodities 8.9 -1.4 -0.6 2.6 2.3 2.7 1.3 41.7
      Gasoline (all types) 9.1 -1.4 -0.7 2.5 2.4 2.8 1.2 42.1
      Fuel oil 3.2 -3.2 2.1 2.9 0.6 -2.1 3.9 42.6
    Energy services 0.6 1.5 0.7 0.2 0.8 1.1 1.2 8.5
      Electricity .0 1.2 0.3 -0.3 0.4 1.0 0.8 5.2
      Utility (piped) gas service 2.5 2.4 1.7 1.7 2.2 1.6 2.7 20.6
  All items less food, energy 0.3 0.9 0.7 0.9 0.3 0.1 0.2 4.0
    Commodities less food, energy 0.1 2.0 1.8 2.2 0.5 0.3 0.2 7.3
      New vehicles .0 0.5 1.6 2.0 1.7 1.2 1.3 8.7
      Used cars and trucks 0.5 10.0 7.3 10.5 0.2 -1.5 -0.7 24.4
      Apparel -0.3 0.3 1.2 0.7 .0 0.4 -1.1 3.4
      Medical care 0.1 0.6 .0 -0.4 0.2 -0.2 0.3 -1.6
    Services less energy 0.4 0.5 0.4 0.4 0.3 .0 0.2 2.9
      Shelter 0.3 0.4 0.3 0.5 0.4 0.2 0.4 3.2
      Transportation 1.8 2.9 1.5 1.5 -1.1 -2.3 -0.5 4.4
      Medical care 0.1 .0 -0.1 .0 0.3 0.3 -0.1 0.9

 

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 November 10, 2021.

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.

Leave a Reply