Gasoline drives U.S. annual inflation to 3.7% in September

U.S. annual consumer inflation rose to 3.7% in September from 3.4% in August, according to the Bureau of Labor Statistics’ October 14 release. The consumer price index for all urban consumers, or CPI-U, increased 0.6% during the month after a 0.4% August rise.

Gasoline was the main contributor to the monthly acceleration. Its seasonally adjusted index rose 9.1%, accounting for more than half of the overall monthly increase. Energy prices collectively rose 5.2%, following a 2.1% increase in August. Over the year, energy prices increased 20.4%, with gasoline up 34.2%.

The adjusted gasoline figure differs from the 6.5% monthly increase before seasonal adjustment. BLS uses that adjustment to remove recurring seasonal patterns; the annual comparisons are unadjusted. The two monthly figures therefore describe the same category on different statistical bases.

Energy services moved less sharply. Electricity rose 0.2% monthly and 4.4% annually, while piped natural gas declined 0.3% monthly but increased 5.0% over the year. The result was not a uniform increase across every energy expense.

Core inflation, excluding food and energy, increased 0.3% monthly, the same pace as August. Its annual rate rose to 2.6% from 2.4%. Gasoline’s importance to the headline measure therefore sat alongside an increase in the annual measure of prices outside those two categories.

Total food prices were unchanged during September after 0.1% increases in each of the previous two months. Grocery prices declined 0.1%, with three of the six major food groups falling and the other three rising. Food prices were still 2.5% above a year earlier, and groceries were 1.8% higher.

The meat, poultry, fish and eggs group fell 0.5% monthly, including a 1.0% decline for beef. Other food at home fell 0.2%. Dairy products declined 0.9%, with milk down 2.0%. Nonalcoholic beverages increased 0.9%, including a 1.5% rise for carbonated drinks. Fruit and vegetables rose 0.5%, while cereals and bakery products increased 0.1%.

Annual comparisons also varied: fruit and vegetables rose 3.7%; other food at home, 1.8%; nonalcoholic beverages, 3.8%; cereals and bakery products, 2.1%; and meat, poultry, fish and eggs, 0.3%. Dairy products were 0.7% cheaper than a year earlier.

Food away from home increased 0.2% monthly and 3.5% annually. Full-service meals rose 0.3% during the month and 3.8% over the year, compared with 0.2% and 3.2% respectively for limited-service meals. The unchanged overall food index therefore did not mean restaurant and grocery prices were standing still together.

Shelter increased 0.4% monthly, following 0.3% in August, and 3.2% annually. Owners’ equivalent rent rose 0.3% during September; rent rose 0.2%. The former estimates the rental value of housing services provided by an owner-occupied home, rather than changes in its purchase price. Lodging away from home increased 2.0% after 2.4% in August.

Recreation rose 0.5% after no August change. Used cars and trucks increased 0.7%, education 0.6%, airline fares 1.2% and apparel 0.3%. New vehicles, personal care and motor vehicle insurance also increased.

Medical care rose 0.1%, reversing an August decline of 0.2%. Hospital services increased 0.7%; prescription drugs fell 1.2%; physicians’ services were unchanged. Communication declined 0.2% after rising 2.3% in August, while household furnishings and operations were unchanged. Annual increases included airline fares at 22.4%, recreation at 2.8%, medical care at 1.5% and education at 3.8%.

Unadjusted CPI-U reached 336.940 on a scale where the 1982–84 average equals 100, rising 0.6% monthly and 3.7% annually. CPI-W, covering urban wage earners and clerical workers, reached 330.654, up 0.7% monthly and 3.9% annually.

The chained CPI-U, designed to account for changes in spending between categories, rose 0.5% monthly and 3.5% annually without seasonal adjustment. BLS said its latest 10 to 12 months remain subject to revision. The agency plans to release October’s CPI on November 10 at 8:30 a.m. ET.