Core CPI Remains Above Fed Mandated 2% For 11th Straight Month As Cost Of Living Surges

Consumer Price rises broadly met expectations across the board with headline CPI jumping from +1.1% YoY to +1.5% YoY - the highest since Oct 2014.

Core CPI (at +2.2% YoY) has now run 11 straight months above The Fed's mandated 2% inflation target.

Once again prescription drug costs rose notably but 'Shelter', 'Rent', and 'Gasoline' costs surged.


The index for all items less food and energy increased 0.1 percent in September after rising 0.3 percent in August. The shelter index increased 0.4 percent in September, reflecting a 0.3-percent increase in the rent index and a 0.4-percent advance in the index for owners' equivalent rent. The index for medical care rose, though the 0.2 percent increase in September was the smallest increase since March. The index for prescription drugs increased 0.8 percent, while the hospital services index was unchanged. The index for motor vehicle insurance continued to rise, increasing 0.4 percent in September. The personal care index increased in September, advancing 0.4 percent. The index for airline fares rose 0.4 percent, following declines in July and August. The index for tobacco also increased 0.4 percent, while the alcoholic beverages index rose 0.3 percent and the education index advanced 0.2 percent.

In contrast to these increases, several indexes declined in September. The index for communication fell 0.8 percent, its largest decline since October 2014, and the apparel index decreased 0.7 percent. The index for used cars and trucks continued to fall, declining 0.3 percent in September. The indexes for new vehicles and for recreation both fell 0.1 percent, while the index for household furnishings and operations was unchanged.

The index for all items less food and energy increased 2.2 percent over the past 12 months. The 12-month increase has stayed in the narrow range of 2.1 percent to 2.3 percent since December 2015. The shelter index has risen 3.4 percent over the last 12 months, and the medical care index has increased 4.9 percent.