"September's Consumer Price Index showed a 0.3% monthly rise and a 3% year-over-year rate, with the core index - which the Fed watches more closely than the headline - rising 0.2%. Economists had expected a slightly hotter print, calling a 0.4% monthly increase in the headline CPI and a 0.3% increase in the core rate. Despite coming in below forecasts, inflation is still rising on an annual basis, with September's pace accelerating from 2.9% in August."
"Energy costs, again, were the main driver, with gasoline up at 4.1%, while food prices moderated and core inflation-excluding food and energy-slowed to 0.2%. But Swonk, chief economist at KPMG, sees something else: a slow-moving problem that's partly statistical, partly structural and increasingly psychological. "It's creep instead of a surge," she said, noting that the headline number masks persistent "stickiness" in service-sector prices and a widening split in who's actually feeling relief."
Headline CPI rose 0.3% in September and 3.0% year-over-year, while the Fed-preferred core CPI increased 0.2% monthly. Forecasts had expected a slightly hotter print, but annual inflation reaccelerated from 2.9% in August and reached its highest level since January. Energy costs, driven by a 4.1% rise in gasoline, were the main contributor to the monthly gain, while food prices moderated and core ex-food-and-energy inflation slowed. Markets reacted by pricing in likely Fed rate cuts in the coming months. Underlying risks include statistical erosion of measurement, persistent service-sector stickiness, and uneven relief concentrated among high-income, asset-rich households.
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