SUMMARY
- The Consumer Price Index (CPI) rose 0.2% in September, bringing the year-over-year increase to 2.4%. This marks a slight decline from the 2.5% annual rate recorded in August, and is the lowest annual rate since February 2021. When excluding volatile food and energy prices, core inflation climbed 0.3% for the month and 3.3% over the past year, exceeding economists’ expectations of a 0.2% monthly increase and a 3.2% annual rise. The uptick in core inflation was driven primarily by higher costs in shelter, car insurance, medical care, clothing, and air travel.
- Both headline and core CPI came in 0.1% higher than forecast for the month, with food prices contributing significantly to the increase. This rise in food prices offset declines in gasoline and energy costs. Notably, food-at-home prices saw their largest jump since January 2023, with record increases in categories such as college textbooks, sports tickets, and jewelry.
- Despite the stronger-than-expected inflation data, analysts suggest this may not prevent the Federal Reserve from considering interest rate cuts in November. The Fed appears to be shifting its focus toward labor market conditions rather than inflation metrics alone.
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