WASHINGTON (10/16/15)--The Consumer Price Index (CPI) fell 0.2% in September, fueled by a 4.7% drop in energy prices and the appreciating U.S. dollar, according to the Bureau of Labor Statistics.
On a year-to-year basis, the not-seasonally adjusted CPI remained unchanged, while the core index rose 1.9%. CPI is a measure of the cost of living and a key indicator in gauging inflation.
The firmer core inflation is a step closer to what Federal Reserve policymakers would like to see before they raise interest rates, but further improvement is still needed, said Economy.com (Oct. 15).
Analysts at Economy.com are revising downward their forecast for inflation throughout the remainder of this year and next.
No change in the core index year-to-year has implications for Social Security benefits recipients, who likely will not receive a cost-of-living adjustment in their 2016 checks, said MarketWatch (Oct. 15).
Social Security recipients saw a 1.7% cost-of-living adjustment in 2015, 1.5% in 2014 and 1.7% in 2013. There was no increase was in 2010 and 2011.
Although energy prices dropped, food prices were stronger than expected, rising 0.4% after a 0.2% gain in August. The CPI without food and energy rose 0.2%, better than the 0.1% gains recorded in July and in August.
Within the core CPI, rents rose 0.4% while owners' equivalent rents increased 0.3%; both figures are up from August.
In the energy prices, commodities dropped 8.6% in September after a 4.1% decrease in August. The CPI for fuel oil fell 2.4% during the period while gasoline prices decreased 9%. Energy services prices fell 0.4%, a reversal of most of the 0.5% gained in August.
The food CPI rose 0.4%, up from August’s 0.2%. Prices for food at home rose 0.2% for the second straight month. Medical care services rose 0.3% after no change in August. Physicians’ services prices rose 0.3%, reversing August’s decline. Hospital services prices rose 0.2%, compared with a 0.3% gain in August.