CPI: U.S. Consumer Inflation Rise 0.1% vs 0.2% Expected In September

by Ike Obudulu Posted on October 11th, 2018

Washington, D.C., USA: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in
September on a seasonally adjusted basis after rising 0.2 percent in August, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.3 percent before seasonal adjustment.

The consensus forecast from economists had expected the Consumer Price Index for All Urban Consumers (CPI-U) to increase 0.2 percent in September on a seasonally adjusted basis.

The shelter index continued to rise and accounted for over half of the seasonally adjusted monthly increase in the all items index. The energy index declined 0.5 percent in September after rising in August. The food index was unchanged in September, as an increase in the index for food away from home offset a decline
in the food at home index.

The index for all items less food and energy rose 0.1 percent in September, the same increase as in August. The shelter index increased 0.2 percent, and the indexes for apparel, motor vehicle insurance, recreation, and airline fares also rose. The medical care index increased as well, though its components were mixed.
The index for used cars and trucks, which fell sharply, and the new vehicles index were among the indexes that declined in September.

The all items index rose 2.3 percent for the 12 months ending September, a smaller increase than the 2.7-percent increase for the 12 months ending August. The energy index rose 4.8 percent over the last year, a notably smaller increase than the 10.2-percent increase for the 12 month period ending August. The index
for all items less food and energy rose 2.2 percent for the 12 months ending September and the food index increased 1.4 percent; these were both the same rate of increase as for the 12 months ending August.

Food

The food index was unchanged in September. The index for food at home, which was unchanged in August, fell 0.1 percent in September with major grocery store food group indexes mixed. The index for meats, poultry, fish, and eggs fell 1.0 percent in September, with all its major component indexes falling. The fruits
and vegetables index also fell, declining 0.5 percent. The index for dairy and related products declined 0.3 percent.

The index for cereals and bakery products increased 0.6 percent, as did the index for nonalcoholic beverages. The index for other food at home rose 0.2 percent. The index for food away from home rose 0.2 percent in September, the same increase as in August.

The food index rose 1.4 percent over the last 12 months, with the index for food away from home rising 2.6 percent and the food at home index increasing 0.4 percent. All the major grocery store food group indexes rose modestly over the period, except for the index for dairy and related products, which was unchanged.

Energy

The energy index declined 0.5 percent in September after rising 1.9 percent in August. After rising 3.0 percent in August, the gasoline index declined slightly in September, falling 0.2 percent. (Before seasonal adjustment, gasoline prices increased 0.3 percent in September.) The electricity index fell 0.5 percent in September after rising in August, and the index for natural gas, which also increased in August, fell 1.7 percent in September.

The energy index increased 4.8 percent over the past year. The index for fuel oil rose sharply, increasing 23.4 percent. The gasoline index rose 9.1 percent over the last 12 months, while the electricity and natural gas indexes both declined, falling 1.2 percent.

All items less food and energy

The index for all items less food and energy increased 0.1 percent in September. The shelter index rose 0.2 percent in September following a 0.3-percent increase in August. The indexes for rent and owners’ equivalent rent both increased 0.2 percent in September, smaller increases than in August.

The index for apparel rose 0.9 percent in September following declines in each of the prior 3 months. The motor vehicle insurance index rose 0.8 percent. The recreation index advanced 0.3 percent in September as the index for recreation services increased 0.7 percent. The medical care index rose 0.2 percent in September after declining in July and August. The index for physicians’ services rose 0.3 percent, but the indexes for hospital services and for prescription drugs both declined. The index for airline fares continued to increase,
advancing 1.0 percent. The indexes for household furnishings and operations, communication, education, alcoholic beverages, personal care, and tobacco all also rose in September.

The index for used cars and trucks fell sharply in September, declining 3.0 percent following increases in each of the last 3 months. The new vehicles index declined slightly in September, falling 0.1 percent.

The index for all items less food and energy rose 2.2 percent over the past 12 months, the same increase as for the 12 months ending August. The shelter index increased 3.3 percent over the last 12 months, and the medical care index rose 1.7 percent. The indexes for used cars and trucks, apparel, and airline fares all
declined over the past year.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.3 percent over the last 12 months to an index level of 252.439 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.3 percent over the last 12 months to an index level of 246.565 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.0 percent over the last 12 months. For the month, the index rose 0.1 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers.

Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals.

Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that meet two requirements: more than one half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months.

The CPI-W population represents about 29 percent of the total U.S. population and is a subset of the CPI-U population.

The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 5,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments).

All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 75 locations.

Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls by the Bureau’s trained representatives.

Market Reaction : S&P futures turn positive after tame CPI data

The S&P 500 and Nasdaq index futures reversed losses to turn positive on Thursday after data showed U.S. consumer prices rose less than expected in September, as underlying inflation pressures appeared to cool slightly.

At 8:34 a.m. ET, Dow e-minis were down 43 points, or 0.17 percent. S&P 500 e-minis were up 0.75 points, or 0.03 percent and Nasdaq 100 e-minis were up 10.75 points, or 0.15 percent.

At 8:29 a.m. ET, Dow e-minis were down 110 points, or 0.43 percent. S&P 500 e-minis were down 6.75 points, or 0.24 percent and Nasdaq 100 e-minis were down 22.75 points, or 0.32 percent.

Author

Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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