Headline CPI higher on energy prices
Headline CPI rose 0.6% in September, slightly quicker than the 0.5% expected by us and consensus and matching the pace in August, as energy prices rose a robust 4.5%. This increase pulled the annual CPI inflation rate higher in September, to 2.0% from 1.7% in August’s report. However, underlying inflationary pressure surprised slightly lower, as core CPI rose 0.1% for the month, also leading to a 2.0% annual inflation rate. This pace of inflation is unlikely to lead the Fed to back away from their very accommodative policy stance any time soon, as Fed officials still expect inflation to soften.
Read the full report here.