The US Consumer Price Index (CPI) report, due on Wednesday, October 15, is expected to show that inflation increased in September as energy prices rose. The data will help investors understand how prices are changing and what the Federal Reserve may do with interest rates.
US core inflation rate expected to rise to 2.5%
Economists surveyed by Bloomberg expect annual US inflation to increase to 3.6% in September, up from 3.4% in August. Consumer prices are forecast to rise 0.6% in September compared with August. This would be faster than the 0.4% monthly increase recorded in August.
Because it excludes food and energy prices, which can be volatile, core inflation is an important measure for Federal Reserve officials.
Jake Krimmel, senior economist at Realtor.com, said the September CPI report is expected to be relatively straightforward. However, he warned that the absence of a major surprise does not mean the inflation problem has been solved, as price pressures remain elevated, according to Yahoo Finance. The September reading will help policymakers assess whether underlying price pressures are easing or remaining high. Economists warn that core inflation could rise more than expected. Higher costs for services and other goods could prevent inflation from slowing, making it harder for the Federal Reserve to bring price increases under control. Rising costs for air travel, hotels and auto parts are among the factors economists are watching. If these costs increase faster than expected, they could push core inflation higher in September. Diesel fuel is widely used to transport goods. A sharp increase in diesel prices can make shipping and distribution more expensive, potentially pushing up prices for businesses and consumers.
This would mean that consumer prices are rising faster than they did a year earlier.
