Inflation cools for sixth month in September but food and shelter stay hot

Consumer price inflation cooled for the sixth straight month in September 2024, coming in at 2.4% annually. Monthly prices rose 0.2% from August , according to data released by the Bureau of Labor Statistics Thursday , Oct. 10.

Core inflation, which removes more volatile food and energy prices, rose 3.3% annually and 0.3% compared to August. September’s report came in just a tick higher than expectations for the month.

Shelter, which has been the main driver of core inflation, went up 0.2% compared to August but is still up 4.9% year-over-year. Annual shelter inflation fell from 5.2% in August. Shelter price increases are still responsible for 65% of the yearly rise in core prices.

The price of groceries ticked up 0.4% on a monthly basis, and food away from home rose 0.3% over August. Food as a whole is up 2.3% annually. In September, the index for eggs rose 8.4% annually, which experts attribute to the ongoing bird flu .

Together, shelter and food account for 75% of all inflation for the month.

The energy index fell 6.8% on an annual basis and 1.9% compared to August. That drop was driven by energy commodity prices, which are down 15.3% annually.

The price of new vehicles fell 1.3% while used vehicles fell 5.1% annually. Vehicle inflation was a major driver of inflation in recent years.

September’s inflation report will further inform the Federal Reserve’s next move in November after lowering its benchmark interest rate by 50 bps in September .

Analysts expect the central bank will make an additional 25 bps cut at the November Federal Open Market Committee meeting, which starts the day after the election.

The U.S. economy added far more jobs than anticipated in September and the unemployment rate ticked down to 4.1%. The U.S. added 254,000 jobs in September when economists expected around 150,000. In August, preliminary data showed 142,000 jobs added and 4.2% unemployment.

The latest inflation report comes in the wake of Hurricane Helene and as Hurricane Milton batters Florida. Atlanta Federal Reserve President Raphael Bostic said the two hurricanes could affect the economy for at least six months.

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