Input Stories

The consumer price index rose 0.3% on a seasonally adjusted basis in September, following a 0.4% increase in August (Bureau of Labor Statistics).

• This report was highly anticipated, as the government shutdown has delayed most economic data releases.
• The data collection for this report occurred prior to the shutdown.

The past year: Over the past 12 months, the index has risen 3.0% before seasonal adjustment.

• In August, the year-to-date increase had been 2.9%.

The details: The gasoline index climbed 4.1% and largely drove the monthly increase in the overall index. The energy index advanced 1.5% over the month.

• The food index grew 0.2% for the month.

Excluding food and energy: The index for all items except food and energy increased 0.2% in September, following a 0.3% rise in both July and August.

• Over the past 12 months, this measure also rose 3.0%, slightly lower than the 3.1% gain over the 12 months ending in August.

Related news: Consumer sentiment also changed little in October, dropping only 1.5 index points from September (University of Michigan Surveys of Consumers).

• Interestingly, “there was little evidence this month that consumers connect the federal government shutdown to the economy. Only about 2% spontaneously referenced the shutdown during this month’s interviews, compared with the 10% of consumers who did so in January 2019 during that 35-day shutdown.”

The NAM says: “The headline and core inflation rate has ticked up in recent months amid an increase in  goods prices, but likely not enough to deter Federal Reserve officials from cutting their interest rate target next week, particularly since inflation rose by less than anticipated in September,” said NAM Chief Economist Victoria Bloom.

• “Therefore, markets anticipate that the Federal Open Market Committee will lower its interest rate target by another 25 basis points at its meeting next week.”