The consumer price index (CPI) for September is projected to rise by 0.6% month-over-month and 3.6% year-over-year, indicating an acceleration in inflation that moves further away from the Federal Reserve's target of 2%.
Core inflation, excluding food and energy, is expected to increase by 0.2% from August and 2.5% year-over-year, suggesting a slight slowdown but still an uptick in annual inflation. Joe Brusuelas, chief economist at RSM, highlighted that rising oil prices, which surged over 14% in September, could push the headline CPI even higher.
This increase in energy costs, exacerbated by geopolitical tensions, may lead the Fed to reconsider its stance on interest rates, especially after signaling a potential rate hike in December.
The upcoming CPI release is particularly significant as it precedes the November midterm elections, during which economic sentiment has notably declined among voters, particularly Republicans and independents.
Additionally, the producer price index (PPI) is expected to show a similar trend, with a forecasted increase of 0.6% from August to September and a 12-month rise of 5.5%, indicating a modest acceleration in wholesale inflation