September CPI Report
As we step into the final quarter of 2024, inflation data from September reflects a continued, albeit uneven, journey towards the Federal Reserve’s target of 2 percent. The Consumer Price Index (CPI) was up 2.4 percent on a yearly basis, down from 2.5 percent in August. The core inflation, a measure that excludes volatile food and energy prices, was 3.3 percent, up from 3.2 percent in August.
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The shelter cost, accounting for over a third of CPI, has finally started to moderate – a welcome news for the Fed that closely watches the stubborn metric. The rent of primary residence has slowed down to 0.3 percent on a monthly basis. Conversely, airline fares and car insurance have ticked up. Egg prices have also increased noticeably.
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Inflation has come down significantly from its peak of 9.1 percent in the summer of 2022. Economists were expecting a larger slowdown for September. Nevertheless, the Fed has successfully navigated the relatively painless, if bumpy, decline in inflation. The next Fed meeting is in November, and they are expected to cut the rates by another quarter of a percentage point.
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