Thursday's highly anticipated Consumer Price Index (CPI) report surprised to the upside. Headline CPI rose 0.4% in September, 0.2 percentage points higher than expected by the Bloomberg consensus. Over the year, the CPI is up 8.2%, a slight step down from August's 8.3% reading. Even with some easing on a year-ago basis, the details of the report suggest inflation still has plenty of momentum and remains broad-based.
Gas prices slid 4.9% last month, helping to offset some solid increases seen elsewhere in the consumption basket. Food price growth remains a major pressure point. The food CPI rose 0.8% in September, trailing only modestly behind the 1.0% average pace over the prior three months. On the bright side, we suspect food inflation will not worsen from here. Food-related commodity prices have rolled over, and in the separately-reported Producer Price Index, transportation and warehousing costs slid for the third consecutive month in September, providing scope for disinflation in food, and goods prices more broadly, in the coming months.
Excluding food and energy, the core CPI rose 0.6% in September, matching August's pace and pushing the year-ago rate up to a fresh 40-year high of 6.6%. Core goods prices were flat over the month, with notable declines in used vehicles (-1.1%), education & communication goods (-0.6%) and apparel (-0.3%). Core services, on the other hand, rose a blistering 0.8%. Strength was broad-based, with sturdy increases in transportation services (1.9%), medical care (1.0%) and owners equivalent rent (0.8%). In short, services inflation continues to gain traction, while goods inflation is showing signs of slowing. For insight on what the latest consumer price data mean for the FOMC's thinking, please see this week's Interest Rate Watch.
This Week's State Of The Economy - What Is Ahead? - 03 April 2020
Wells Fargo Economics & Financial Report / Apr 04, 2020
Efforts to contain the virus are leading to millions of job losses and it’s likely only a matter of time before a majority of economic data reveal unprecedented declines.
This Week's State Of The Economy - What Is Ahead? - 08 November 2019
Wells Fargo Economics & Financial Report / Nov 09, 2019
Optimism soared this week on hopes of a forthcoming trade deal, as equity markets hit all-time highs and the yield curve steepened.
This Week's State Of The Economy - What Is Ahead? - 01 July 2022
Wells Fargo Economics & Financial Report / Jul 14, 2022
As with the Mets and Yankees when they ran into the Astros over the last couple days, consumers staying power is showing signs of running out as inflation persists and confidence moves sharply lower.
This Week's State Of The Economy - What Is Ahead? - 01 October 2021
Wells Fargo Economics & Financial Report / Oct 10, 2021
Economic data this week indicated that the ongoing expansion still has some momentum despite some familiar headwinds, though this week\'s releases were largely overshadowed by a busy week on Capitol Hill.
This Week's State Of The Economy - What Is Ahead? - 17 July 2020
Wells Fargo Economics & Financial Report / Jul 18, 2020
Two countervailing themes competed for attention this week in financial markets. The first is that for the most part, economic data continue to surprise to the upside and do not yet rule out prospects for that elusive V-shaped recovery.
This Week's State Of The Economy - What Is Ahead? - 20 August 2021
Wells Fargo Economics & Financial Report / Aug 24, 2021
The Wells Fargo Economics team notes in the Commentary that new COVID cases in New Zealand disrupted the Reserve Bank of New Zealand\'s plan to tighten monetary policy this week.
September 2020 Economy At A Glance
Wells Fargo Economics & Financial Report / Sep 19, 2020
A March survey by the Federal Reserve Bank of Dallas found most exploration firms need West Texas Inter-mediate (WTI) at $49 per barrel or higher to profitably drill a well.
This Week's State Of The Economy - What Is Ahead? - 04 June 2021
Wells Fargo Economics & Financial Report / Jun 08, 2021
The CDC\'s relaxation of its mask mandate occurred mid-May, and as data for that month begins rolling in this week, it is evident there is no lack of demand. Supplies, on the other hand, are a worsening problem.
This Week's State Of The Economy - What Is Ahead? - 17 March 2023
Wells Fargo Economics & Financial Report / Mar 21, 2023
Retail sales declined 0.4% during February, while industrial production was flat (0.0%). Housing starts and permits jumped 9.8% and 13.8%, respectively.
This Week's State Of The Economy - What Is Ahead? - 25 November 2020
Wells Fargo Economics & Financial Report / Nov 28, 2020
It may be a holiday-shortened week, but there have been as many developments and economic indicators packed into three days as we can recall seeing in any other week this year.
