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? - 18 August 2023
Wells Fargo Economics & Financial Report / Aug 23, 2023
The FOMC meeting minutes acknowledged the economy\'s resilience and continued to stress the Committee\'s resolve to bring inflation back down toward its 2% goal.
This Week's State Of The Economy - What Is Ahead? - 03 June 2022
Wells Fargo Economics & Financial Report / Jun 08, 2022
While talk of recession has kicked up in recent weeks, the majority of economic data remain consistent with modest growth.
This Week's State Of The Economy - What Is Ahead? - 29 July 2022
Wells Fargo Economics & Financial Report / Jul 31, 2022
Unlike the local temperatures, data released this week showed U.S. economic growth modestly declined in Q2.
This Week's State Of The Economy - What Is Ahead? - 08 January 2021
Wells Fargo Economics & Financial Report / Jan 12, 2021
The manufacturing sector is showing a great deal of resilience, with the ISM Manufacturing survey exceeding expectations, at 60.7, and factory orders remaining strong.
This Week's State Of The Economy - What Is Ahead? - 10 June 2022
Wells Fargo Economics & Financial Report / Jun 13, 2022
CPI increases continue to sizzle like this weekend’s temperature, putting consumers in a worse mood than Texas Rangers fans (with their 9.5 games back $500 million middle infield).
This Week's State Of The Economy - What Is Ahead? - 31 May 2024
Wells Fargo Economics & Financial Report / Jun 04, 2024
Markets digested a light lineup of economic data on the holiday-shortened week. The second look at first quarter GDP revealed an economy increasingly pressured by high interest rates as headline growth was revised lower.
This Week's State Of The Economy - What Is Ahead? - 02 July 2021
Wells Fargo Economics & Financial Report / Jul 13, 2021
We added 850,00 jobs in June, but much of that was State governments school districts in some parts of the Country reopening just in time for summer break.
This Week's State Of The Economy - What Is Ahead? - 03 January 2020
Wells Fargo Economics & Financial Report / Jan 04, 2020
Markets were also pressured from the latest ISM manufacturing report, which signaled further deterioration in the sector with the index falling to its lowest level since 2009.
This Week's State Of The Economy - What Is Ahead? - 19 May 2023
Wells Fargo Economics & Financial Report / May 23, 2023
Economic data continue to suggest the U.S. economy is only gradually losing momentum. Consumers continue to spend, and industrial and housing activity are seeing some stabilization.
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.
