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Consumer price indexes

US Consumer Prices Rise Less Than Expected in September, Bolstering Fed Rate Cut Expectations

Strategic Insights

— 2 min read

US consumer prices increased 0.3% from August and 3% from a year earlier, missing forecasts of 0.4% and 3.1%, respectively. The Labor Department's Consumer Price Index (CPI) report also showed core CPI, excluding volatile food and energy components, climbed 0.2% on the month and 3% annually, both below estimates. Apparel prices were among the biggest gainers, rising 0.7% likely due to higher import duties. Analysts noted that while inflation is cooling, it remains a concern for the Federal Reserve, which may delay rate cuts despite the moderation in prices.

Key Takeaways:

  • The Consumer Price Index (CPI) increased 0.3% from August and 3% from a year earlier, below forecasts of 0.4% and 3.1%, respectively.
  • Core CPI, which excludes volatile food and energy components, climbed 0.2% on the month and 3% annually, both undershooting estimates.
  • Apparel prices were among the biggest gainers, up 0.7%, likely reflecting higher import duties.
  • Inflation for big-ticket items such as used vehicles and housing continued to cool, according to Jeffrey Roach, chief economist at LPL Financial.
  • Gina Bolvin, president of Bolvin Wealth Management Group in Boston, noted that the report highlights areas of persistent pressure and signs of easing in the broader economy.
  • Analysts, including Chris Zaccarelli, chief investment officer at Northlight Asset Management, see the latest data as supportive of the Fed's easing plans.
  • Nigel Green, CEO of the deVere Group, said the focus is shifting from prices to jobs, with policymakers considering the labor market amid the government shutdown.

Statistics:

  • The Labor Department stated that the CPI increased 0.3% from August.
  • US consumer prices rose 3% from a year earlier.
  • Core CPI, excluding volatile food and energy components, climbed 0.2% on the month and 3% annually.
  • Apparel prices rose 0.7% likely due to higher import duties.
  • Inflation for big-ticket items such as used vehicles and housing continued to cool.

Sources:

  • "US consumer prices rose less than expected in September, offering fresh evidence that inflation pressures continue to moderate and bolstering expectations the Federal Reserve could begin easing rates later this year." - Labor Department
  • "September's CPI tells a familiar story -- inflation is cooling, but not convincingly enough." - Gina Bolvin, president of Bolvin Wealth Management Group in Boston
  • "Housing prices are decelerating and should slow further amid the growing supply of multifamily housing and shrinking demand from lower immigration." - Jeffrey Roach, chief economist at LPL Financial
  • "This report does nothing to stop the Fed from a 25-basis-point cut next week, and corporate profits are continuing to increase." - Chris Zaccarelli, chief investment officer at Northlight Asset Management
  • "The inflation data was anticipated, and it's no longer the deciding factor. The Fed's attention has turned squarely to the labour market." - Nigel Green, CEO of the deVere Group

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