The Consumer Price Index (CPI) measures the average change in the prices of various consumer goods and services. The September US CPI data are in. Compared with August, the September CPI rose 0.4%. Housing costs went up 0.7%. CPI’s core measure, which excludes energy and food prices, increased 0.6%. While the monthly increases seem low, a comparison with the data a year ago shows a very different picture. The year-over-year inflation rate was 8.2% in September (8.3% in August). The core measure rose 6.3% in August and 6.6% in September. Housing costs also went up 6.6% in September. Considering these yearly comparisons, it is very likely that the Federal Reserve will have another 0.75 percentage points increase in interest rate in November. The current policy rate is in the range of 3 to 3.25%. Some economists expect the rate to reach 5% in the future.
Why it matters: The 6.6% core measure increase in September is the highest in four decades. In addition, UK’s inflation rate rose to 10.1% in September, a 40-year high.
Further Possibilities
1. A service that tracks the CPI and provides analysis on how it will affect different industries
2. A subscription service that offers tips on how to save money based on the current CPI
3. Insurance against inflation-related losses
