KEY POINTS
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The Consumer Price Index rose 0.6% in September, while the inflation index increased 3.7% over the past year, the U.S. Bureau of Labor Statistics reported.
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Gasoline prices jumped 9.1% during the month, pushing the energy index up 5.2%.
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Core inflation increased 0.3% in September, with shelter prices up 3.2% over the past year.
What Drove the Monthly Inflation Increase
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6% on a seasonally adjusted basis in September after increasing 0.4% in August, the U.S. Bureau of Labor Statistics reported today.
Over the past 12 months, inflation has been untamed, with the all-items index increasing 3.7%, up from 3.4% in August.
Energy drove the monthly gain. The energy index rose 5.2%, led by a 9.1% increase in gasoline in September.
Over the past year, energy prices increased 20.4%, including a 34.2% increase for gasoline. Electricity rose 0.2% in September, while natural gas fell 0.3%.
ConstructConnect Chief Economist: Fed Unlikely Finished with Rate Increases
The energy spike keeps fuel and transportation costs in focus for the construction industry as contractors price work and monitor project budgets.
And future rate hikes remain in view, as well.
Following the Federal Reserve's quarter-point rate hike in September, ConstructConnect Chief Economist Michael Guckes wrote that inflation remains a critical focus to the Fed's dual-mandate, and the US Central Bank is unlikely done raising interest rates.
Guckes reported in September that, "The central bank’s quarterly projections also signaled that policymakers expect to raise rates a second time later this year, bringing the rate to approximately 4.1%."
The target range for the federal funds rate is 3.75% to 4%.
The chief economist added that, "That outlook suggests that the Fed knows that inflation won't be brought to within its 2% target by today's actions alone. In fact, recent decades of history shows that the Fed's success in battling inflation has only come issuing a series of sequential rate hikes as was seen in 2017 and 2022."
How is Core Inflation, Without the Volatile Food and Energy Components
The index for all items less food and energy increased 0.3% in September, matching August, and rose 2.6% over the past year, up from 2.4% in August.
Shelter rose 0.4% during the month and 3.2% over the year.
Other annual increases the U.S. Bureau of Labor Statistics reported includes education, up 3.8%, recreation, up 2.8% and medical care, up 1.5%.
How are Food Prices Impacting US Inflation
Food prices were unchanged in September. Food at home fell 0.1%, while food away from home rose 0.2%. Over the past year, the food index increased 2.5%, so the neutral September reading is a morsel of good news among a buffet of rising prices.
The BLS is scheduled to release October CPI data on Nov. 10.
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