The inflation fight officially stalled in September

Sorry folks, we’re going to be talking about inflation a little while longer.

Progress in the inflation fight stalled last month: Prices for consumer goods rose at a faster than expected pace in September, according to data released Thursday by the Bureau of Labor Statistics.

The Consumer Price Index climbed 3.7% from a year ago, and jumped 0.4% on the month. But core CPI, which analysts and policymakers weigh more heavily since it ignores fickle food and energy prices, decreased for the sixth straight month. It hopped 0.3% from August, and rose 4.1% from a year ago. That marks core CPI’s smallest yearly growth rate since 2021.

There’s one main culprit for the rise: rent. 70% of the jump in monthly core CPI, and “more than half of the overall monthly increase,” according to CNN, was attributable to the shelter index, which measures rental leases and the “implicit rental value of owner-occupied properties.”

Rent has been the main character in the inflation narrative lately, but some economists are optimistic the September shelter index figures will be a blip.

“Market rents are flat across the country since the end of last year,” Moody’s Analytics chief economist Mark Zandi told CNN. “So it’s only a matter of time—months—before we start to see much slower increases in shelter costs. And once that happens, we’ll be back within spitting distance of the Fed’s target.”

And beyond that, some common inflation indicators showed promising signs. “Food price inflation is at its lowest rate since March 2021,” per CNN, marking “the first time since early 2022 that food prices did not outpace overall inflation.”

“Overall, there is nothing here that will convince Fed officials to hike rates at the next FOMC meeting, and we continue to expect a more rapid decline in inflation and weaker economic growth to result in rates being cut much more aggressively next year, than markets are pricing in,” deputy chief US economist at Capital Economics Andrew Hunter said in a note, Axios reported.