The U.S. Bureau of Labor Statistics (BLS) released its September Inflation report on October 10th, 2019, for the 12 months through the end of September 2019.
Annual Inflation is Down Very Slightly
- Annual inflation in September was 1.71% virtually unchanged from August’s 1.75%.
- Inflation has been in a narrow range throughout 2019. 1.79% in May, 1.81% in July, 1.65% in June, peaking at 2.00% in April.
- Inflation peaked at 2.95% in July 2018.
- The CPI-U index in September was 256.759 up from 256.558 in August.
- Monthly Inflation for September was 0.08%, August was -0.01%, July was 0.17%, June was virtually zero at 0.02%, May was 0.21%, April was 0.53%, March was 0.56%.
- Next release November 13th
Monthly Inflation:
According to the BLS commissioner’s report, “The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in September on a seasonally adjusted basis after rising 0.1 percent in August, the U.S. Bureau of Labor Statistics reported today.
Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment. Increases in the indexes for shelter and food were offset by declines in the indexes for energy and used cars and trucks to result in the seasonally adjusted all items index being flat.
The energy index fell 1.4 percent as the gasoline index declined 2.4 percent. The food index increased 0.1 percent in September after being unchanged in each of the prior 3 months.”
Read the full commentary here.
Seasonally Adjusted Inflation Table
From the September 2019 column in the table above we can see that on a monthly seasonally adjusted basis, Gasoline and Energy Commodities were down sharply at -2.4% and –2.3%% respectively while the entire Energy category was down -1.4% in September. On a Non-adjusted annual basis, however, gasoline was actually down -8.2% over the year and fuel oil was down -8.5%. On an annual basis, Food away from home was up 3.2%, shelter was up 3.5%, Used cars and trucks were up 2.6% and Medical care services were up 4.4%.
Current Inflation Chart
As we can see from the chart below, throughout 2019 the inflation rate has stayed within a fairly narrow range peaking at 2.0% in April and bottoming at 1.52% in February. The index remains below its moving average indicating that the trend is still down. However, they are getting closer together so a small spike upward next month could easily cross above the moving average.
Federal Reserve Actions
Since the beginning of 2018 the Federal Reserve (FED) has followed a policy of Quantitative Tightening (QT) i.e. they have reduced the amount of “debt” they held. This debt was acquired during the 3 phases of quantitative easing they employed in an effort to add liquidity to the market to combat the 2008 crash. From the chart, we can see that they roughly eliminated about 1/3rd of the debt created in QE3. But in the last month, we can see an uptick indicating that they have once again begun accumulating debt rather than eliminating it or remaining steady.
- Quantitative Tightening (QT) continues… check it out here.
- What is Quantitative Tightening?
FED Funds Rate
Another indicator of the shift from tight money to easy money is the reduction in the Fed Funds Rate i.e. the rate the FED charges member banks. The FED drastically reduced interest rates in August falling from 2.40% in July to 2.13% in August. It further reduced rates in September to 2.04%.
For more info See NYSE ROC and MIP.
Inflation Forecast
See our Moore Inflation Predictor to see our current projections.
Not Seasonally Adjusted Monthly Inflation Rates
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
| 2016 | 0.17% | 0.08% | 0.43% | 0.47% | 0.41% | 0.33% | (0.16%) | 0.09% | 0.24% | 0.12% | (0.16%) | 0.03% |
| 2017 | 0.58% | 0.31% | 0.08% | 0.30% | 0.09% | 0.09% | (0.07%) | 0.30% | 0.53% | (0.06%) | 0.00% | (0.06%) |
| 2018 | 0.54% | 0.45% | 0.23% | 0.40% | 0.42% | 0.16% | 0.01% | 0.06% | 0.12% | 0.18% | (0.33%) | (0.32%) |
| 2019 | 0.19% | 0.42% | 0.56% | 0.53% | 0.21% | 0.02% | 0.17% | (0.01%) | 0.08% |
See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.
Misery Index
The misery index as of October 2019 (based on the most recent official government inflation and unemployment data for the 12 months ending in September) is at 5.21%. It was 5.45% in August and 5.51% in July. It has only been this low a few times since data became available in 1948. Surprisingly, one of those times was in September of 2015 when the Misery Index briefly neared 5%. Before that, we had 2006, 1998 and 1965 which were considerably higher at 5.71%, 5.74%, and 5.70% respectively. May of 1959 was 5.45% so you have to go all the way back to 1955 to see a Misery index below 5%.
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NYSE Rate of Change (ROC)©
The NYSE ROC is once again in Buy/Hold territory after crossing above its moving average.
See the NYSE ROC for more info.
NASDAQ Rate of Change (ROC)©
Hold Signal! Unlike the NYSE, the NASDAQ- ROC remains barely below the moving average.
See NASDAQ ROC for more.
Regional Inflation Information
The U.S. Bureau of Labor Statistics also produces regional data. So if you are interested in more localized inflation information you can find it here.
| AL | AK | AR | AZ | CA | CT | CO | DC | DE | FL | GA | GU | HI | IA |
| ID | IL | IN | KS | KY | LA | MA | MD | ME | MI | MN | MO | MS | MT |
| NC | ND | NE | NH | NJ | NM | NV | NY | OH | OK | OR | PA | PR | RI |
| SC | SC | SD | TX | UT | VA | VI | VT | WI | WA | WI | WV |
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