Consumer Prices Rise, Trend Still Benign
The Consumer Price Index rose as expected but the results remain benign, the Bureau of Labor Statistics suggested Thursday.
Led by broad gains, the all-items index edged up 0.2% in September, half of the 0.4% uptick in August. Over the past 12 months the CPI remains in deflationary territory at -1.3%. The Fed’s ideal rate is +2.0%.
The index can be volatile on a monthly basis due to energy and gas prices, so investors looks to the “core index” to strip away those components. This month the core index also increased 0.2%, following advances of 0.1% in July and August. For the past 12 months core prices have risen 1.5%.
“The basic message of this report is simply that the substantial economic and labor market slack are continuing to place considerable downwards pressure on consumer prices,” said TD strategist Millan Mulraine.
The energy index advanced 0.6% in September, a modest advance compared with the 4.6% increase in August. The 1.0% climb in gas prices was the biggest push on the headline, but it follows a 9.1% surge in August. Costs for natural costs declined.
The food index declined for the sixth time in the last eight months. That led the annual change into negative territory (-0.2%) for the first time since April 1967.
Analysts from RDQ pointed out that owners equivalent rent â€
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