CPI inflation September 2024

The pace of price increases last year took an unexpected step in September as policymakers consider their next move on interest rates, according to a Labor Department report Thursday.

The consumer price index, a broad measure of the cost of goods and services across the U.S. economy, rose a seasonally adjusted 0.2% for the month, translating to an annual inflation rate of 2.4%. Both values ​​were 0.1 percentage points above the Dow Jones consensus.

The annual inflation rate was 0.1 percentage points lower than in August.

Excluding food and energy, core prices rose 0.3% month-on-month, an annual rate of 3.3%. Both core values ​​were also 0.1 percentage points above the forecast.

Much of the increase in inflation – more than three-quarters of the increase – was due to a 0.4% increase in food prices and a 0.2% increase in housing costs, the Bureau of Labor Statistics said in the release. This offset a 1.9% decline in energy prices.

Other factors contributing to the increase included a 0.3% increase in used car costs and a 0.2% increase in new car costs. Medical care services rose 0.7% and clothing prices rose 1.1%.

The release comes as the Federal Reserve has begun cutting interest rates. After a half-percentage point cut in September, the central bank is expected to continue cutting interest rates, although the pace and extent remain questionable.

Fed officials have become more confident that inflation will fall back toward its 2 percent target, but at the same time expressed some concern about the state of the labor market.

In other economic news Thursday, initial jobless claims posted an unexpected rise, reaching 258,000 in the week ended Oct. 5. That was the highest number since August 5, 2023, an increase of 33,000 compared to the previous week and significantly more than the forecast is 230,000.

Current claims, which are a week behind, rose to 1.861 million, an increase of 42,000.

As for inflation, rising prices in various food categories showed that inflation is proving stubborn.

Egg prices jumped 8.4%, bringing the unadjusted 12-month gain to 39.6%. Butter rose 2.8% month-over-month and 7.8% year-over-year.

However, housing costs, which were higher this year than Fed officials expected, rose 4.9% year-on-year, a decline that could suggest that overall price pressures are easing in the future. The category accounts for more than a third of the total weight in calculating the CPI.

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