US Inflation Rate Rises to 5-Month High on Energy Prices

US consumer prices increased 2.2 percent year-on-year in September 2017, missing market expectations of 2.3 percent and following a 1.9 percent gain in the previous month. Still it was the highest inflation rate since April, as hurricane-related production disruptions at oil refineries in the Gulf Coast area boosted energy prices.

Year-on-year, energy prices jumped 10.1 percent, following a 6.4 percent rise in August, due to hurricane-related production disruptions at oil refineries in the Gulf Coast area. Main increases were reported for gasoline (19.3 percent from 10.4 percent in August) and fuel oil (15.6 percent from 9.4 percent) while prices rose less for electricity (1.7 percent from 2.3 percent) and utility piped gas service (3.8 percent from 5.4 percent). Additional upward pressure came from food (1.2 percent from 1.1 percent in August), transportation services (3.9 percent from 3.5 percent) and medical care services (1.7 percent from 1.6 percent). Meanwhile, inflation slowed for medical care commodities (1 percent from 2.4 percent in August) and shelter (3.2 percent from 3.3 percent).

In contrast, prices continued to fall for for new vehicles (-1 percent from -0.7 percent in August), used cars and trucks (-3.7 percent from -3.8 percent) and apparel (-0.2 percent from -0.6 percent).

Core inflation rate, which excludes prices of food and energy, stood at a two-year low of 1.7 percent for the fifth consecutive month, missing market expectations of 1.8 percent.

On a monthly basis, consumer prices went up 0.5 percent, the biggest gain since January, but below market expectations of 0.6 percent. The gasoline index increased 13.1 percent in September and accounted for about three-fourths of the increase. Other major energy component indexes were mixed, and the food index rose slightly (0.1 percent). Excluding food and energy, consumer prices rose 0.1 percent, also missing expectations of 0.2 percent.

BLS | Joana Ferreira |
10/13/2017 1:07:22 PM