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September CPI Report Shows Inflation at a 3.7% Annual Rate

Core CPI at a 2.6% annual rate.

Illustration of capital building with bubbles of currency inflating

The Bureau of Labor Statistics reported that the Consumer Price Index increased 3.7% in September from year-ago levels after increasing 3.4% in August. Year-over-year core CPI (which excludes volatile food and energy costs) rose 2.6%, outpacing the August rate of 2.4%.

Overall inflation rose 0.6% month over month after rising 0.4% in August. Core inflation rose 0.3%, matching the August increase.

Economists had expected CPI to rise 0.5% on a monthly basis and increase 3.6% year over year in September, according to the consensus estimates from FactSet. Core CPI was expected to come in up 0.2% on a monthly basis and up 2.4% year over year.

September CPI Inflation Report Highlights

  • CPI rose 0.6% for the month after rising 0.4% in August.
  • Core CPI rose 0.3% after rising by the same amount in August.
  • CPI increased 3.7% year over year after increasing 3.4% the prior month.
  • Core CPI rose 2.6% from year-ago levels after it rose 2.4% in August.

Food prices held steady 0.0% in September after increasing 0.1% in August. Grocery prices fell 0.1%, while restaurant prices increased 0.2%. Overall energy prices increased 5.2% after rising 2.1% last month, while utility gas prices fell 0.3%, fuel oil prices increased 15.3%, gasoline prices rose 9.1%, and electricity prices increased 0.2%. Shelter prices rose 0.4% in September after rising 0.3% in August.

What Is the CPI?

The Consumer Price Index is a mainstream measure of inflation that tracks changes in consumer prices for a wide variety of goods and services including food, housing, healthcare, and energy.

The CPI report is widely followed by investors, but it isn’t the only way to keep track of inflation. When it comes to the Federal Reserve’s decisions on interest rates, the focus is generally on the Personal Consumption Expenditures Price Index. The Fed targets a 2% inflation rate, but that is based on the PCE inflation index, not the CPI. However, the CPI generally makes front-page news because it is released earlier than the PCE and contains much of the same information. Both reports are released on a monthly cadence.

This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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