The US consumer prices rose in September for the sixth consecutive month, but annual inflation weakened more than expected from its 6-year high peak in June and July.
The consumer price index (CPI) rose last month by 0.1% compared to August when it grew by 0.2%, while the expectations on the financial markets were for increase of 0.2%.
On an annual basis, the consumer inflation slowed down sharply to 2.3% in September from 2.7% in August, with expectations for 2.4%. This is the slowest growth in inflation since February and its retreat from the 6-year high of 2.9% in June and July (the highest US inflation since February 2012).
The core CPI index, excluding food and energy prices, rose by 0.1% against August when it also rose by only 0.1%.
The core inflation rose by 2.2% on a year-on-year basis for the second consecutive month, with a growth forecast of 2.3% and a 2.4% increase in July, the strongest growth since September 2008. It should be borne in mind that the Fed monitors the core inflation as one of the most important indicators of the state of inflation in the US, which has recently risen steadily over the important target of the bank by 2%.
The reason for the lower inflation in September was the decrease in energy prices by 0.5% on a monthly basis. On an annual basis they rose by only 4.8% after growth with 10.2% in August. The food prices remained at August levels and rose 1.4% on an annual basis.
Despite the weakening of inflation in September, it remains stable at high levels above the important 2% threshold. This means that today’s data should not lead to changes in the expectations of the financial markets for a new increase in the Fed’s main interest rate at the December meeting.