The annual rate of US consumer inflation halved from nearly 3% in the period from July 2018 to February 2019 and then subsequently fluctuated in a range from 1.5% to 2.0%. However, “headline” inflation is known to be volatile and so references are often made to “core” inflation figures for purposes of analysis. This measure has mostly ranged between 1.7% and 2.3% in recent years and it has not been below 2.0% since early 2018. It hit a new post-GFC high just recently.
The latest consumer price index (CPI) figures released by the Bureau of Labor Statistics indicated seasonally-adjusted consumer prices remained unchanged on average in September, less than the 0.1% increase which had been expected and less than August’s 0.1% increase. On a 12-month basis, the inflation rate slipped from August’s annual rate of 1.8% to 1.7%.
NAB currency strategist Rodrigo Catril described the figures as “soft” and said, “hawks within the FOMC are losing important ammunition in order to push back at the prospect of further Fed easing.” (“Hawks” are people who generally favour tighter monetary policy.)
Core inflation, a measure of inflation which strips out the volatile food and energy components of the index, increased on a seasonally-adjusted basis by +0.1% for the month, less than the 0.2% which had been expected and less than in the previous three months. Even so, the annual rate remained unchanged at 2.4%.