September Inflation Expected to Accelerate as Energy Costs Push CPI Higher
Upcoming consumer price data for September is expected to show accelerating inflation, driven largely by climbing energy costs. Economists expect the headline Consumer Price Index to rise 0.6% on a monthly basis and 3.6% year-over-year. Core inflation, which excludes volatile food and energy prices, is projected to increase 0.2% from August and 2.5% from a year earlier.
Rising oil prices are a key contributor to headline inflation pressure. Global benchmark Brent crude rose more than 14% in September, ending the third quarter up roughly 42% and trading near $105 per barrel. Sustained higher energy costs risk spilling into non-energy categories, making it more challenging to curb overall price increases without additional central bank intervention.
Market participants anticipate that the Federal Reserve may implement another interest rate hike at its December meeting. Following the consumer inflation reading, investors will also track Thursday's Producer Price Index, which is forecasted to increase 0.6% for the month and 5.5% on a 12-month basis.
Key points
- September headline CPI is expected to rise 0.6% monthly and 3.6% year-over-year.
- Core CPI is projected to increase 0.2% from August and 2.5% annually.
- Brent crude surged over 14% in September to trade near $105 per barrel.
- Traders anticipate another Federal Reserve rate increase at the December meeting.
- Thursday's Producer Price Index is forecast to rise 0.6% monthly and 5.5% year-over-year.
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How we writeDisclaimerQuestions and answers
What are the forecast figures for the September CPI report?
September headline CPI is expected to rise 0.6% month-over-month and 3.6% year-over-year, while core CPI is forecasted to increase 0.2% monthly and 2.5% annually.
How are rising oil prices affecting inflation metrics?
Brent crude climbed over 14% in September to around $105 per barrel, driving headline inflation higher and increasing the risk of higher costs across non-energy sectors.
When is the Federal Reserve expected to raise interest rates next?
Futures traders anticipate the Federal Reserve will likely raise interest rates again at its December meeting to combat persistent inflation pressures.