Instant View: Gas and shelter costs send US consumer prices higher in Sept
NEW YORK (Reuters) — U.S. consumer prices increased in September amid higher costs for rent and gasoline, but underlying inflation is slowing, supporting financial market expectations that the Federal Reserve would not raise interest rates next month.
The consumer price index (CPI) increased 0.4% last month, the Labor Department said on Thursday. The CPI jumped 0.6% in August, which was the largest increase in 14 months.
In the 12 months through September, the CPI advanced 3.7% after rising by the same margin in August. Year-on-year consumer prices have come down from a peak of 9.1% in June 2022.
MARKET REACTION:
STOCKS: S&P 500 futures slightly pared gains after the data and were last up 0.1%
BONDS: The yield on 10-year Treasury notes moved higher and was last up 1.7 basis points at 4.614%; The two-year U.S. Treasury yield was up 5.5 basis points at 5.0602%.
FOREX: The dollar index strengthened and was last up 0.290%, with the euro down 0.31% to $1.0584.
COMMENTS:
STUART COLE, CHIEF MACRO ECONOMIST, EQUITI CAPITAL
«An increase in the headline rate of CPI, which will be disappointing but not entirely unexpected, given that fuel prices had been trending higher over the month. And it is also largely reflecting what the PPI numbers had suggested yesterday, which showed upwards pressure from energy prices plus food. These things are unlikely to be repeated going forward; indeed, energy prices have already started to fall.
»So when you factor in these reversals we are already seeing, plus the increase has some as no real surprise, then I think that explains why the market reaction is not larger. On a more encouraging note, the core rate has continued to fall, down to 4.1% on an annual basis while the monthly reading is
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