News & Insights

In September, consumer prices increased 0.3% over the month and 3.0% over the year, up from the 2.9% annual rise in August but lower than the 3.1% advance anticipated. Core CPI, which excludes more volatile energy and food prices, rose 0.2% over the month and 3.0% over the year, slightly lower than the 3.1% 12-month increase in the month prior.

Energy costs advanced 1.5% over the month in September, after ticking up 0.7% in August, and grew 2.8% over the year. Within the energy index, gasoline prices jumped 4.1% from August, the largest factor in the monthly headline increase, but declined 0.5% from September 2024. Meanwhile, utility (piped) gas prices dropped 1.2% over the month, but surged 11.7% over the year.

In September, food prices edged up 0.2% over the month, after increasing 0.5% in August, with prices for food away from home rising 0.1%. Over the year, food prices advanced 3.1%, with food away from home jumping 3.7%. Meanwhile, prices for food at home climbed 0.3% from August and 2.7% from September 2024. Four of the six indexes for major grocery store food groups increased in September.

The shelter index grew 0.2% over the month and 3.6% over the year, continuing its downward 12-month trend since peaking at an 8.2% annual gain in March 2023. Meanwhile, prices for used cars and trucks decreased 0.4% over the month but soared 5.1% over the year. Relatedly, motor vehicle maintenance and repair rose 0.2% from August and 7.7% from September 2024.

The headline inflation rate has ticked up in recent months amid an increase in core goods prices, but likely not enough to deter Federal Reserve officials from cutting their interest rate target this week, particularly since inflation rose by less than anticipated in September. Therefore, markets anticipate that the Federal Open Market Committee will lower its interest rate target by another 25 basis points at its meeting this week.