6 Stocks To Buy As Inflation Advances In September

In the latest sign of rising inflation, consumer prices continued to move upward during the month of September. This release adds further weight to PPI data released last week, which revealed that producer prices had also increased last month. The Fed now seems to have enough evidence to implement a rate hike later this year.

Rising costs of gasoline, higher rents and costlier electricity were some of the primary triggers for last month’s higher consumer prices. Picking stocks gaining from this trend would be a good idea as the economy continues to strengthen.

CPI’s Increase Highest in 5 Months

The consumer price index moved up 0.3% in September, following a 0.2% increase in August. This was the highest advance recorded over the last five months. Additionally, the index gained 1.5% on a year-over-year basis, the largest increase on a yearly basis since Oct 2014. In August, the CPI had gained 1.1% on a yearly basis.

More than half of the increase in CPI was attributable to a 5.8% increase in gasoline prices. However, core CPI, which excludes the costs of food and energy increased by only 0.1%, lower than the 0.3% increase recorded in August. At the same time, rents, which make up a large chunk of core CPI experienced their largest rise in almost a decade.

Oil, REITs, and Power Find Favor

Oil prices have firmed in the period following the landmark OPEC agreement on production controls. On Wednesday, Saudi Arabia’s energy minister said that the continuing decline in oil prices was nearing an end. Meanwhile, favorable data has continued to bolster crude prices. In the latest such report, U.S. domestic crude inventories declined for the week ending Oct 14.

Despite the marginally weaker jobs report released this month, the labor market is on a stronger footing. Steady wage increases have also led to higher electricity demand. Meanwhile, last month was the warmest September in more than a century, according to NASA, providing a more immediate catalyst for incremental demand for power.

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