September Consumer Price Index Fell As Expected

There may be a little bit of inflation centered in housing, otherwise the September consumer price report doesn't point to any urgency for a rate liftoff. Overall the CPI fell 0.2 percent as expected with the year-on-year coming in unchanged. But when stripping out food, which moved higher in Septmeber, and energy, which moved sharply lower, the core CPI rose 0.2 percent which is the high-end expectation. Year-on-year, the core, unlike the total CPI, is moving higher, but not by much, up 1 tenth at 1.9 percent.

The pressure in the report is housing where owners' equivalent rent is up, but again only by 1 tenth to plus 0.3 percent. But the BLS is warning that shelter costs are showing "acceleration" and "momentum". This is a plus for the hawks but only a limited one. This report is unlikely to shake up expectations which are calling for no rate hike in October but with a still significant chance for December.

Recent History Of This Indicator:
Pulled down by energy prices, the consumer price index is forecast to contract 0.2 percent in September following August's 0.1 percent decline. The core, which excludes both food & energy, is expected to rise but only fractionally, by plus 0.1 percent. Consensus outcomes would not raise talk of a Fed rate hike.