Consumer Price Index: September 2023 Key Findings

Headline Consumer Price Index (CPI) for All Urban Areas Annual

• The annual headline inflation rate rose to 5.4% in September 2023 from 4.8% in August 2023.
• Following a two-month upswing, headline inflation softened to 5.3% in March from 5.6% in February.
• Consumer prices rose 3.7% in the year through September.

There were some optimistic details in the September report:

• The core inflation rate, which excludes volatile food and energy prices, rose by only 0.2% in September, the smallest increase since January.
• Gasoline prices fell by 4.9% in September, the largest monthly decline since April 2020.
• Used car prices fell by 1.1% in September, the first monthly decline since May 2020.

Overall, the September CPI report is a mixed bag. While headline inflation remains elevated, there are some signs that inflationary pressures may be starting to ease. The core inflation rate is rising slowly, and some of the most volatile components of the CPI, such as gasoline and used car prices, are starting to decline.

It is important to note that the CPI is a backward-looking measure of inflation. It does not reflect the most recent changes in economic conditions, such as the recent decline in oil prices.

The Federal Reserve is closely monitoring the CPI and other inflation indicators to assess the need for further interest rate hikes. The Fed's goal is to bring inflation back down to its target of 2%.