September 2019 CPI: Year-Over-Year Inflation Rate Unchanged At 1.7%

According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 1.7 % year-over-year (unchanged from the reported 1.7 % last month). The year-over-year core inflation (excludes energy and food) rate also was unchanged at 2.4 % and is above the target set by the Federal Reserve.

Analyst Opinion of the Consumer Price Index

Energy was the main reason for inflation modertion. Medical care services cost inflation rose from 4.3 % to 4.4 % year-over-year.

The market expected (from Econoday):

(Click on image to enlarge)

(Click on image to enlarge)

As a generalization - inflation accelerates as the economy heats up, while the inflation rate falling could be an indicator that the economy is cooling. However, inflation does not correlate well to the economy - and cannot be used as an economic indicator.

The major influence on the CPI was energy.

Increases in the indexes for shelter and food were offset by declines in the indexes for energy and used cars and trucks to result in the seasonally adjusted all items index being flat. The energy index fell 1.4 percent as the gasoline index declined 2.4 percent. The food index increased 0.1 percent in September after being unchanged in each of the prior 3 months. The index for all items less food and energy rose 0.1 percent in September after increasing 0.3 percent in each of the last 3 months. Along with the shelter index, the indexes for medical care, household furnishings and operations, and motor vehicle insurance all rose in September. The indexes for used cars and trucks, apparel, new vehicles, and communication all declined. The all items index increased 1.7 percent for the 12 months ending September, the same increase as for the 12 months ending August. The index for all items less food and energy rose 2.4 percent over the last 12 months, also the same increase as the period ending August. The food index increased 1.8 percent over the last year, while the energy index decreased 4.8 percent.

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