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Council of Economic Advisers

13 Oct, 11 tweets, 2 min read

Inflation as measured by CPI increased 0.4% month-over-month in September—slightly above expectations and August’s rate. More than half of the increase came from price increases for food and shelter. 1/

Core inflation—without food/energy—rose 0.2% month-over-month, at expectations and above August’s rate of 0.1%. 2/

Year-over-year, headline inflation rose by 5.4%, slightly above the yearly increase in August, while core inflation rose by 4.0%, holding steady at August’s rate. 3/

Month-over-month growth in shelter costs rose to a 0.4% increase in September, reflecting a faster increase in prices for rent of primary residence (what renters pay) and owners’ equivalent rent (what home owners pay). 4/

Shelter is now contributing more to monthly core CPI inflation than was typical in 2019. A previous CEA blogpost discussed how increases in rents and house prices impact CPI. 5/ whitehouse.gov/cea/blog/2021/…

Used cars, new cars, auto parts, and car rentals together added only 3 basis points (functionally nil for the second month in a row) to core CPI inflation in September, while pandemic-affected services subtracted 5 basis points. 6/

This is the second month in a row that pandemic-affected services have subtracted from monthly core CPI inflation, likely reflecting the impact of elevated COVID cases due to the Delta variant. 7/

Year-over-year inflation will likely remain elevated into 2022 given the higher monthly inflation seen this summer. 8/

Month-to-month, CPI can be volatile. Looking at the average rate over the last three months, headline inflation has been about 0.4 percent, relative to 0.8 percent in the three months before. 9/

While year-over-year real wages fell, much of that reflects dynamics that have already been baked in. Month-over-month, real hourly wages rose for the second month in a row. 10/

We know that the recovery from the pandemic will not be linear. The Council of Economic Advisers will continue to monitor the data as they come in. /end

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Inflation as measured by CPI increased 0.3% month-over-month in August—slightly below expectations and below July’s rate of 0.5%. The deceleration largely reflected a fall in car prices and also in pandemic-affected services. 1/

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