Consumer Price Increase Reported for September

Federal Reserve officials are attributing consumer price increases to supply chain constraints and increased consumer demand as the economy steadily reopens after the wild ups and downs of 2020.

A slight Consumer Price Index (CPI) rise is reported on a seasonally adjusted basis with September seeing some of the most significant increases this year.

Excluding the volatile food and energy components, the “core” CPI increased by 0.2% in September, after a 0.1% increase in August. The indexes for new vehicles (+1.3%), household furnishings and supplies (+1.3%), and motor vehicle insurance (+2.1%) rose in September, while the indexes for apparel (-1.1%), and several travel-related components including airline fares (-6.4%), lodging away from home (-0.6%), and used cars and trucks (-0.7%) all declined over the month.

In September, the indexes for food and shelter contributed more than half of the monthly increase in the headline CPI. The food index rose by 0.9% in September, the largest monthly gain since April 2020. The index for food at home jumped by 1.2%, while the index for food away from home rose by 0.5% over the month. The index for shelter rose by 0.4% in September. The index for owners’ equivalent rent (OER) increased by 0.4% over the month, the largest monthly increase in the past five years.

Meanwhile, the price index for a broad set of energy sources increased by 1.3% in September, after a 2.0% increase in August. Gasoline (all type) rose by 1.2% in September, slower than a 2.8% increase in August.

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