US consumer prices likely ran out of energy last month

Triggered by a gasoline-led drop in retail energy quotes, the CPI probably edged 0.2% lower in September, following a 0.1% downtick in the prior month (see accompanying table). Pump prices likely tumbled by 8.7% after seasonal adjustment during the reference period, more than double the 4.1% falloff recorded in August. After incorporating anticipated declines in residential electricity and natural gas costs, the CPI energy gauge is expected to have fallen by 4.7%, knocking four ticks off the headline measure last month. Sans projected movements in food (0.2%) and energy components, the core CPI probably continued apace, rising by 0.1% (0.148% unrounded) for a third consecutive month. Increased vehicle and shelter costs, along with a rebound in airline fares, are expected to buoy the core CPI in September.

"Our projections, if accurate, would place the level of the CPI 0.1% below the figure recorded in September 2014. Meanwhile, the year-to-year growth of the core subindex is expected to remain at 1.8% for a fourth straight month", says Societe Generale.