U.S. September CPI Data Likely to Mirror August Trends, Says Economist

Dean Baker, Chief Economist at the UK research institution CEPR, indicated that the U.S. Consumer Price Index (CPI) data for September is expected to reflect a growth rate similar to that of August. In August, the energy sector saw a 0.7% increase, and a similar rapid growth rate is anticipated for September. The household food sector, which rose by 0.6% in August, may experience a slowdown in growth for September. The core CPI monthly rate is likely to reach 0.3% again, potentially rounding up to 0.4%.
Furthermore, both the overall and core CPI annual rates for September are expected to be close to 3.0%, which is a full percentage point above the Federal Reserve's target of 2.0%. For the Federal Reserve, the level of inflation might be less concerning than the direction of its change. Inflation is more likely to rise rather than fall, at least until the full impact of tariffs is passed on to consumers. If new tariffs are implemented and affect more industries, the situation could become more complex. Without a significant economic downturn, it is challenging to envision a scenario where inflation meets the Federal Reserve's target in the short term.