So that’s that:
Headline US CPI inflation climbed just 0.1 per cent (seasonally adjusted) from August to September, and the core number stayed flat. And as you can see in the chart above, the 12-month core number actually ticked down slightly to 0.8 per cent.
No shockers here, and we don’t have much more to say about it that we didn’t already discuss on Thursday. Instead we’ll point you to an interesting graph and commentary from Econompic Data about the PPI numbers that might also apply to CPI:
My expectation is that the gap between headline and core PPI will continue to grow as the weak dollar will continue to cause commodities (input) prices to rise, while the muddle through economy will weigh on the ability to pass-through these price increases.
As we’ve said before, something similar could happen with the consumer inflation numbers if commodity prices keep climbing, causing a disconnect between core and headline figures. Nothing to worry about yet, just something to keep any eye on.
Related links:
CPI – BLS
QE-easy on commodities too – FT Alphaville