Headline CPI expected to rise 0.6% month-on-month; core CPI projected to decelerate from 0.3% to 0.2%.
Data release set for the 14th; monitoring price trends in goods and services remains vital ahead of the Oct. 27–28 FOMC meeting.
U.S. consumer inflation for September is expected to climb as energy costs weigh on the headline figure. However, with forecasts suggesting a cooling in the monthly pace of core inflation—which excludes volatile food and energy—the primary focus will be on the extent to which price pressures in non-energy sectors have stabilized.
A survey of economists conducted by Reuters suggests that the U.S. Consumer Price Index (CPI) for September will rise by 0.6% month-on-month and 3.7% year-on-year. The core CPI is expected to show a 0.2% monthly increase and a 2.5% year-on-year rise. The U.S. Bureau of Labor Statistics (BLS) is scheduled to release the data at 9:30 p.m. KST on the 14th.
If these projections hold, the headline and core monthly trends will diverge. In August, the headline CPI rose 0.4% month-on-month, while core CPI rose 0.3%. For September, while headline inflation is expected to accelerate, the momentum of core inflation is projected to soften.
The anticipated rise in headline inflation is largely attributed to energy costs. Reuters noted that the surge in energy prices is expected to drive the overall CPI higher in September. In August, gasoline prices climbed 3.9% from the previous month, accounting for more than one-third of the total monthly increase in the headline CPI.
However, the core CPI is not entirely immune to energy price fluctuations. While the index explicitly excludes energy items like gasoline, it does not strip out the secondary effects of fuel costs as they filter into the pricing of goods and services. Airfares are a prime example; in August, they rose 2.7% from the previous month. While not all of this increase can be blamed solely on oil prices, analysts are watching to see if the upward trend in services, including air travel, persists in September.
Distinctions must also be made regarding the core inflation outlook. While the month-on-month growth rate is expected to moderate, the year-on-year figure is projected to tick up slightly from 2.4% in August to 2.5% in September. Because year-on-year figures are influenced by base effects—the price levels from the same period last year—market participants must look closely at monthly data and specific sub-item trends to gauge the actual pace of recent price increases.
This CPI report comes just ahead of the Federal Open Market Committee (FOMC) meeting scheduled for October 27–28. Should the monthly core inflation figure align with expectations and confirm a broad-based cooling in goods and services prices, it may help alleviate some market anxieties regarding further monetary tightening.
