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The U.S. CPI increased more than anticipated in September; Core CPI increased by 0.6%.

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  • The U.S. CPI increased more than anticipated in September; Core CPI increased by 0.6%.

The U.S. CPI increased more than anticipated in September; Core CPI increased by 0.6%.

The U.S. CPI increased more than anticipated in September; Core CPI increased by 0.6%.

Again exceeding expectations, consumer inflation in the United States in September dashed hopes for a decrease that may persuade the Federal Reserve to halt interest rate increases.

The Bureau of Labor Statistics reported that the consumer price index increased 0.4% from August and was up 8.2% annually. Despite a little decrease from 8.3% in August, the headline rate is still far higher than the Fed's goal rate of 2%.

Core prices, which exclude erratic components such as food and energy, increased by 0.6% for a second consecutive month, signaling widespread and ongoing inflationary pressure throughout the economy. The core CPI increased from 6.3% a month earlier to a record 40-year high of 6.6% in yearly terms. In light of this, commentators cautioned that the fight against the worst inflation 

As a result, analysts cautioned that the fight against the worst inflation in a generation is far from over - especially in light of the fact that gasoline prices, which helped to lower the September print, have since started to rise again in the face of an impending reduction in OPEC and its allies' crude output.

It's difficult to ignore the impact of excessive aggregate demand growth in this CPI report, according to a tweet from senior fellow at the Mercatus Institute David Beckworth. The revelation had a severe impact on U.S. financial markets, which priced in yet another aggressive interest rate move from the Fed at its next meeting at the beginning of November.

The benchmark 2-year Treasury note's yield, which is highly responsive to predictions of Fed action, increased by 15 basis points to 4.44%.

, while the 10-Year note yield, a measure of longer-term inflation, momentarily reached 4% before falling to 3.99%, still representing a daily gain of 9 basis points. As higher interest rates became more likely, the dollar also increased by more than 0.5 percent as a result of the news. The Nasdaq 100 Futures contract lost 2.8%, the S&P 500 Futures slid 2.1%, and the Dow Jones Futures lost 1.7% as the market for stock futures moved in the other way. Again, housing expenses had a significant role in the positive surprise. 40% of the increase in the core index was attributed to the CPI's "shelter" component, which increased by 0.8% on the month. The BLS uses the "owner equivalent" approach to determine housing expenses.


According to the "owner equivalent rent" theory, which some economists reject as an incorrect representation of actual housing expenses, the BLS determines the cost of shelter. However, Mike Konczal, macroeconomic director at the Roosevelt Institute, noted in a tweet that prices for non-housing-related services are growing at a rate that, on their own, would bring the CPI as a whole to 2.5%. In September, just airline costs were up 42.9% year over year. Core CPI increased by 0.6% in September, exceeding expectations once more for the U.S. CPI.