US Inflation Rate Lowest in 7 Months


Annual inflation in the US fell to 2.3 percent in September of 2018 from 2.7 percent in August and below market expectations of 2.4 percent. It is the lowest inflation rate since February, mainly due to a sharp slowdown in gas prices and smaller increases in fuel and shelter costs.

Year-on-year, prices slowed for fuel oil (23.4 percent compared to 30.9 percent in August); gasoline (9.1 percent compared to 20.3 percent); and shelter (3.3 percent compared to 3.4 percent). Also, prices fell for apparel (-0.6 percent compared to -1.4 percent); electricity (-1.2 percent compared to -0.5 percent); and utility piped gas service (-1.2 percent compared to 0.1 percent). On the other hand, inflation went up for transportation services (4 percent compared to 3.9 percent); medical care services (2 percent compared to 1.9 percent); and new vehicles (0.5 percent compared to 0.3 percent) while food inflation was flat at 1.4 percent.

Excluding food and energy, core inflation was steady at 2.2 percent, the same as in August but below forecasts of 2.3 percent. 

On a monthly basis, consumer prices edged up 0.1 percent, below 0.2 percent in August and forecasts of 0.2 percent. The shelter index continued to rise and accounted for over half of the seasonally adjusted monthly increase. The energy index declined 0.5 percent in September after rising in August. The food index was unchanged, as an increase in the index for food away from home offset a decline in the food at home index.  

Excluding food and energy, core consumer prices edged up 0.1 percent, the same as in August but below forecasts of 0.2 percent. The shelter index increased 0.2 percent, and the indexes for apparel, motor vehicle insurance, recreation, and airline fares also rose. The medical care index increased as well, though its components were mixed. On the other hand, the index for used cars and trucks fell sharply, and the new vehicles index also declined.

US Inflation Rate Lowest in 7 Months


BLS | Joana Taborda | joana.taborda@tradingeconomics.com
10/11/2018 12:49:32 PM