US Inflation Slows Again as Consumer Prices Ease in September

The pace of annual inflation slowed in the United States for a second month in row after surging just a few months back to a more than six-year high, according to government data released Thursday, Oct. 11, 2018,

In September, American consumers paid less for food and energy. Their rate of energy increases also slowed from a year ago compared to August. Core consumer inflation, though, which discounts pricing gains in food and energy, ran at the same pace as the previous month and year.

Consumer prices increased 0.1% in September after advancing 0.2% in August, the Labor Department said in its monthly report on the Consumer Price Index. The CPI is a broad measure of what Americans pay for everything from coffee to cars. The positive gain marks a sixth straight.

In key pricing categories:

  • Prices at the pump edged 0.2% lower last month after climbing 3% in August. Gasoline prices still increased 9.1% from September 2017. The broader index for energy, which combines items like gasoline, electricity and fuel oil, declined 0.5% in September after rising 1.9% previously. The Labor Department’s report shows energy prices grew 4.8% year-over-year compared to 10.2% previously.

  • Overall food prices were unchanged in September after two consecutive monthly increases of 0.1%. For a fourth straight time and the sixth instance this year, food prices increased 1.4% over the last 12 months.

Excluding the more volatile food and energy components, so-called core consumer prices in September rose 0.1%, copying their increase in August.

Shelter or housing costs rose 0.2% last month following two straight increases of 0.3%. The index ran at 3.3% year-on-year. 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.

In the headline figure, U.S. inflation increased 2.3% for the 12 months ending September, slowing from the previously reported annual inflation rate of 2.7%. The level reached as high as 2.9% in both June and July, the biggest gains since February 2012.

Core inflation rose 2.2% from a year earlier, the same increase for the 12-month period ending August. July was the standout month this year so far with its 2.4% increase, the quickest core inflation rate since September 2008. Until March, the 12-month rate had held at either 1.7% or 1.8% for 10 straight months. The core annual reading 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 nine months through September, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). 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 2018 Consumer Prices – Gains & Losses in Percent

  Mar 2018 Apr 2018 May 2018 June 2018 July 2018 Aug 2018 Sept 2018 12 Month
All items -0.1 0.2 0.2 0.1 0.2 0.2 0.1 2.3
  Food 0.1 0.3 .0 0.2 0.1 0.1 .0 1.4
    Food at home 0.1 0.3 -0.2 0.2 0.2 .0 -0.1 0.4
    Food away from home 0.1 0.2 0.3 0.2 0.1 0.2 0.2 2.6
  Energy -2.8 1.4 0.9 -0.3 -0.5 1.9 -0.5 4.8
    Energy commodities -4.7 3.0 1.6 0.6 -0.6 3.0 -0.2 9.6
      Gasoline (all types) -4.9 3.0 1.7 0.5 -0.6 3.0 -0.2 9.1
      Fuel oil -0.7 2.7 -0.7 2.9 1.2 2.2 0.3 23.4
    Energy services -0.2 -0.5 -0.1 -1.5 -0.4 0.4 -0.8 -1.2
      Electricity .0 -0.6 0.1 -1.4 -0.4 0.3 -0.5 -1.2
      Utility (piped) gas service -1.2 -0.4 -0.6 -1.7 -0.5 0.9 -1.7 -1.2
  All items less food, energy 0.2 0.1 0.2 0.2 0.2 0.1 0.1 2.2
    Commodities less food, energy -0.1 -0.1 -0.1 .0 0.1 -0.3 -0.3 -0.3
      New vehicles .0 -0.5 0.3 0.4 0.3 .0 -0.1 0.5
      Used cars and trucks -0.3 -1.6 -0.9 0.7 1.3 0.4 -3.0 -1.5
      Apparel -0.6 0.3 .0 -0.9 -0.3 -1.6 0.9 -0.6
      Medical care 0.1 -0.2 1.3 0.2 -1.1 -0.3 -0.1 0.7
    Services less energy 0.3 0.2 0.3 0.2 0.3 0.2 0.2 3.0
      Shelter 0.4 0.3 0.3 0.1 0.3 0.3 0.2 3.3
      Transportation 0.2 -0.4 .0 0.2 0.5 0.3 0.5 4.0
      Medical care 0.5 0.2 -0.1 0.5 0.1 -0.2 0.2 2.0

 

The BLS usually 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 become public on November 14, 2018.

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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