Economists expect the US Consumer Price Index (CPI) to have risen by 0.6% in September, according to a Bloomberg survey, after a 0.4% increase in August. This would be the largest increase in five months. The CPI is closely watched by financial markets and is set to be released by the Bureau of Labor Statistics on Wednesday. The expected increase is attributed to rising gasoline prices, which have been a major contributor to inflation.
The core CPI, which excludes food and fuel, is expected to have risen by 0.2% in September, slowing down from August. Compared to the same period last year, the core CPI is expected to have risen by 2.5%, a slight increase from the previous month. This is significant as it is the smallest annual increase since 2021. The moderate inflation is likely to support the view that the Federal Reserve will not raise interest rates at its next meeting on October 28.
The US Federal Reserve raised interest rates in September for the first time in three years, but the slowdown in job growth in September and moderate inflation have reduced the need for another rate hike. The Fed has been trying to balance the need to control inflation with the risk of slowing down economic growth. The release of the CPI data is expected to provide further insight into the state of the US economy.
The rise in gasoline prices has been a major contributor to inflation in recent months, but it has not yet fed through to higher prices for most consumer goods and services. This is likely to be a concern for policymakers at the Federal Reserve, who are trying to understand the dynamics of inflation and how it is likely to evolve in the coming months.
The Bloomberg survey of economists also found that the expected increase in the CPI is likely to be driven by rising energy prices, rather than a broad-based increase in prices. This suggests that the inflationary pressures in the US economy are still relatively contained, and that the Fed may not need to take drastic action to control inflation.
The release of the CPI data on Wednesday is expected to have a significant impact on financial markets, particularly in the US interest rate market. A stronger-than-expected increase in inflation could lead to an increase in interest rates, while a weaker-than-expected increase could lead to a decrease in interest rates.
Overall, the expected increase in the US CPI in September is likely to be driven by rising gasoline prices, while core inflation is expected to remain moderate. This is likely to support the view that the Federal Reserve will not raise interest rates at its next meeting, and that the US economy is likely to continue to grow at a moderate pace.
Key points
- The US Consumer Price Index is expected to have risen by 0.6% in September, driven by rising gasoline prices.
- The core CPI is expected to have risen by 0.2% in September, slowing down from August.
- The expected increase in inflation is likely to support the view that the Federal Reserve will not raise interest rates at its next meeting.
