Economists project 96% odds of another Fed rate hike before year-end
The U.S. Bureau of Labor Statistics reported Wednesday that the consumer price index rose 0.6% in September, with gasoline prices jumping 9.1% on the month.
The Bureau said gasoline accounted for more than half of the monthly rise in the all-items index. The overall energy index advanced 5.2% for the month, with electricity up 4.4%. Over the prior twelve months, gasoline prices climbed 34.2% and fuel oil prices rose 74.2%, the Bureau reported.
The annual inflation rate reached 3.7% over the prior twelve months, well above the central bank’s 2% target. The September reading marked an acceleration over August’s 3.4% annual rate, the Bureau said, reflecting sustained price pressure across the energy sector with the energy index contributing the bulk of the monthly gain.
The so-called core CPI, which excludes the volatile food and energy categories, rose 0.3% for the month and 2.6% over the prior twelve months. The food index was unchanged after two consecutive monthly increases of 0.1%. Within food, nonalcoholic beverage prices rose 0.9%, including a 1.5% increase for carbonated drinks.
The Dow Jones consensus had projected annual inflation of 3.6% and monthly growth of 0.6%, putting the actual monthly print in line with expectations.
The September report follows the Federal Reserve’s first benchmark interest rate increase in three years, delivered at its September meeting. That decision lifted the target range to 3.75% to 4%. The consumer price index is the Federal Reserve’s preferred measure of inflation, the Bureau said.
Stock market futures declined following the release. Economists projected a 96% likelihood that the Federal Reserve would raise its benchmark rate again before the end of the year.
The Federal Open Market Committee is scheduled to hold its next meeting and rate decision on October 27 and 28.