U.S. inflation nears Fed’s 2% target

CHICAGO – The Consumer Price Index (CPI) for September 2024 showed inflation at 2.4% for the month, slowing to close to the Federal Reserve’s 2% target. This is the lowest level since February 2021, according to the U.S. Bureau of Labor Statistics. Although the CPI report showed inflation cooling, the slowdown was less than expected.

After seasonal adjustment, urban residents’ CPI increased by 0.2%, of which the food index increased by 0.4% and the housing index increased by 0.2%. These two indices accounted for more than 75% of the monthly increase in all items. This was higher than the 0.01% forecast.

“Unfortunately, the preferred trend indicator has risen to 1.98% in September after increasing 1.87% in August, so it’s moving in the wrong direction compared to the monthly and year-over-year indicators,” said Dr. Peter Rupert, University of California, Santa Clara. Professor of Economics at the University of Barbara. “However, it should be noted that our measure is slightly below the Fed’s 2% target.”

The energy index fell 1.9% for the month, with energy commodities, gasoline and fuel oil also falling, while energy services, electricity and utility (pipeline) gas services rose 0.7%.

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USA Today The report said that the decline in U.S. gasoline prices over the past few months was the result of slowing global economic growth and record U.S. oil production.

While air ticket prices increased by 3.2%, hotel prices fell by 1.9%. Another item that declined was healthcare commodities (-0.7%).

“Energy CPI fell sharply, down 1.9% month-on-month and 6.8% year-on-year. Fuel oil fell 6.0% this month and 22.4% year-on-year. Food and energy prices are known to be highly volatile, so look at core prices (excluding food and energy) Might be a better indicator. While the year-over-year numbers were little changed, both the monthly and trend indicators rebounded significantly, rising to 3.81% (3.42% in August) and 3.05% (2.68% in August).”

Real average hourly earnings for all employees increased 1.5% year-over-year (seasonally adjusted) in September, according to the bureau’s actual earnings summary. A summary of the employment situation in September showed that although non-agricultural employment increased by 254,000, the unemployment rate remained unchanged from the previous month at 4.1%.

Bloomberg According to the report, the recently announced number of initial jobless claims “increased much more than expected, reaching 258,000, while the media forecast was 230,000.” While this may have been affected by the hurricane, one market participant said the increase – which reached its highest level in more than a year – was hard to ignore. “

“An increase in jobless claims will make the Fed’s decision-making more difficult as it balances inflation with the labor market,” Dr. Rupert said.