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inflation fall in september Lower gasoline prices, along with easing other price pressures in areas such as housing, have brought relief to consumers’ wallets, according to the agency. consumer price index.
this consumer price indexThe key inflation gauge rose 2.4% last month from September 2023, according to the U.S. Bureau of Labor Statistics.
The figure was down from 2.5% in August, implying slower price growth. It was also the smallest annual reading since February 2021.
However, September CPI data was slightly higher than economists’ forecasts.
But there are some concerns, such as the growth of categories like apparel, auto insurance and groceries. However, Moody’s chief economist Mark Zandi said most appeared to be “one-off” increases.
“Inflation trends remain very positive,” Zandi said. “This month is just temporary and I don’t think this is going to last.”
The Consumer Price Index measures how quickly prices are rising or falling for a basket of goods and services, from car repairs to peanut butter and living room furniture.
Inflation has fallen sharply from a peak of 9.1% in June 2022 during the pandemic.
“We’ve made significant progress over the past two years,” said Sarah House, senior economist in Wells Fargo Economics.
In other words, the labor market slows down Related Economists more than inflation in recent months.
The Federal Reserve has raise interest rates Starting from the beginning of 2022, we will vigorously respond to high inflation. start cutting them last month to ease pressure on the labor market and economy.
Gas station prices drop
Annual food inflation ‘fairly benign’
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Food inflation over the past year has also been “fairly mild,” House said.
Grocery prices have increased 1.3% since September 2023, according to CPI.
House said farm prices – the “major input cost” of food – were either falling or looking “more stable”. Examples of agricultural products include corn, wheat, coffee, and soybeans.
House said wage growth has slowed and the cost of labor to transport or prepare food has dropped. As consumers become more cautious about their spending, grocery stores are offering more price incentives and promotions, she said.
Still, grocery inflation did see a big monthly jump from August to September, rising from 0% to 0.4%.
“I don’t think this is going to last,” Zandi said.
Individual food products have unique supply and demand dynamics that may affect pricing.
For example, egg prices increased by more than 8% from August to September and by 40% since September 2023, mainly due to another factor bird flu outbreakEconomists say it is a contagious and deadly disease that affects chickens and other birds.
Housing inflation is falling
Housing accounts for the largest proportion of CPI and has always been The biggest stumbling block Economists say that in order to bring inflation back to target levels.
“That’s a huge component,” House said. “What happens there can really change things in terms of headline inflation and core inflation.”
Consumer Price Index (CPI) housing inflation, which includes rental prices and an equivalent measure for homeowners, has gradually declined but remains high. That has puzzled many economists, as real estate data shows average rent growth for new tenants has been rising for about two years.
In September, housing inflation fell on a monthly basis to 0.2% from 0.5% in August.
Economists said this was one of the most encouraging signs in the latest consumer price index report.
“Housing inflation is clearly slowing now,” Zandi said. “That’s a key part of the consumer price index.”
“Slower back speed”
Housing falls under the “services” category of the economy.
Economists say commodity inflation has largely fallen back from pandemic-era nosebleed levels as abnormal supply and demand dynamics ease.
But House said service sector inflation “is still receding quite slowly.”
In large part, that’s because of the shelter. But other categories also remain elevated.
For example, motor vehicle insurance prices rose 1.2% from August to September and are up about 16% since September 2023, according to CPI data.
House said many services were “heavily dependent” on prices in other parts of the economy. For example, insurance companies now Increase car insurance premiums This follows an earlier spike in new and used car prices.
It often takes a while for this dynamic to trickle down from paper to service, she said.
She said: “Inflation in the service industry peaks more slowly during the rise and may fall back more slowly during the decline.”
