Consumer Prices Increase Driven By Gasoline, Housing Costs As Inflation Builds
According to the latest Labor Department data, in September the US Consumer Price Index rose 0.3 percent, up from August’s increase of 0.2 percent. The CPI has increased 1.5 percent since September 2015. The biggest increases in the index came from the gasoline index, which rose 5.8 percent. The overall energy index also contributed heavily to cost increases, with a 2.9 percent increase, the largest since April. And, the shelter index saw a 0.4 percent increase, its largest since May. The food index was the only sub index without growth during the month, as it remained unchanged. The AP reports that the latest CPI results point “to a steady buildup of inflation that could keep the Federal Reserve on track to raise interest rates in December.” Chris Rupkey, Chief Economist at MUFG Union Bank in New York, is quoted saying, “Today’s inflation data are not hot enough to put a rate hike up on the table next month, but it is also true the economy is strong enough to generate some inflation pressures.” The so-called core CPI “gained 0.1 percent last month after climbing 0.3 percent in August.” The Wall Street Journal says the increase suggests a steady build-up of inflation. The Journal notes that while the index today is higher than it was a year ago, it is still moving at a slow pace historically.
What This Means For Small Businesses
Small business owners are looking for indications that the economy is regaining strength. The latest CPI data is a positive signal that inflation may be increasing, and the economy may be gaining some ground. However, it remains to be seen whether the Federal Reserve will take action to boost interest rates, a move that would more definitively give small businesses a signal that they are in a favorable period for growth.
Additional Reading
Reuters and Bloomberg News also cover the latest CPI data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.