CPI increased 0.6% for September 2012

The September Consumer Price Index increased 0.6% from August. The CPI measures inflation. This is the second month in a row for CPI to increase 0.6% and these jumps are the largest since June 2009. The reason again is gas with a 7.0% increase in the gasoline index for September and August's CPI jump was also caused by gas at the pump with a 9.0% increase in gasoline prices. When removing food and energy inflation, of which gasoline is a part, core inflation increased 0.1% for September, the same as August. Below is CPI's monthly percentage change.



CPI is up 2.0% from a year ago and the highest increase since April 2012, as shown in the below graph.



Energy overall jumped 4.5% for September, but is now up 2.3% for the last 12 months. Don't expect that yearly change to last. The BLS separates out all energy costs and puts them together into one index. Energy costs are also mixed in with other indexes, such as heating oil for the housing index and gas for the transportation index. Fuel oil for the month increased 4.1% and natural gas also increased 2.0% for September. Below is the overall CPI energy index, or all things energy.



Graphed below is the household energy index which includes electricity and natural gas, shown by monthly percentage change. This month the index increased 0.8% and for the last 12 months has declined -3.6%. This is a different, special index to show the overall costs for energy into your home only, (unless you drive your car in your mansion or run generators for your tent).


household energy CPI


Graphed below is the CPI gasoline index, which increased 7.0% this month.



Below are gas prices, last updated September 10th. We can see gas prices are roaring back and projections are gas will stay high. We now have more quantitative easing and Middle East social unrest, so lord knows how high they will go now. High oil prices have a strong correlation with recessions.



Core inflation, or CPI minus food and energy, increased 0.1% for September, the 3rd month in a row. Core inflation has risen 2.0% for the last year. Core CPI is one of the Federal Reserve inflation watch numbers. These low figures probably helped justify more quantitative easing, which increases commodity prices.



Core CPI's monthly percentage change is graphed below.


core cpi


Shelter increased 0.2% and is up 2.2% for the year. Rent increased 0.3% and the cost of renting has increased 2.7% for the last 12 months. Airfares rose 1.4%, a reflection of increasing fuel costs. Used cars & trucks declined -1.4%, while new autos decreased -0.1% for September. Hotels & Motel's' increased 0.6% and college textbooks increased 0.9% and are up 7.8% in year. Graphed below is the percentage change from a year ago of rent, the largest monthly household expense for people who can least afford increases as those with less money disproportionately rent vs. own.


cpi rent


Food and beverages overall increased 0.1% for September and are up 1.6% from a year ago. The food at home index (think groceries) did not increase for the month and is up 0.8% for the year. Lord knows where the BLS goes shopping for this figure sure is out of sync with most Americans' real grocery bill. The BLS claims this is the lowest yearly increase in groceries since August 2010.

Nonalcoholic beverages increased 0.9% in September. Meats, poultry, fish, and eggs dropped -0.6% and lamb alone dropped -5.9% in a month. Fresh fruits dropped -0.9% after last month's pop up in prices.

Eating out, or food away from home increased 0.2% from last month and is up 2.8% from a year ago.



The Medical care index increased 0.3% and has increased 4.1% over the last 12 months. Hospital services increased 0.6% in a month. Medical commodities are things like your prescription drugs and decreased -0.1% and are up 3.3% for the year. Below is a bar graph of the Medical index. Nowhere else do we see a ridiculous, constant, to the point the graph forms a triangle, increase in costs.


CPI Medical


According to the BLS, for the year, food and beverages, which includes food at home, made up 15.2% of the index. Housing is 40.9% and transportation, including gas for the car, is 17.2% and all energy is 10%. Medical care is only 7.1%, they claim. All items minus food and energy are considered 75.8% of the total price expenditures for consumers.

The DOL/BLS does take yearly surveys on where the money goes in the monthly budget, but as one can see, food and energy are significant amounts of the monthly finances. Run away costs in these two areas can break the bank, so can food. Additionally CPI uses substitution, so if steak goes through the roof, somehow we're all just fine with hamburger and prices didn't really overall increase much. If we see food inflation flat over the next year, we know something is wrong with the measurement as the drought is projected to dramatically increase food prices.

CPI-W for the month, unadjusted was 228.184, a 2.2% increase for the year, and increased 0.5% for the month, although not seasonally adjusted. CPI-W is used to calculate government transfer payments, such as social security increases. The cost of living adjustment (COLA) for social security and other government payments will be 1.7% for 2013. This is a small increase and believe this or not, there is talk of stopping adjusting social security and other government payments for inflation as part of budget cuts, which is de facto cutting social security payments without admitting to doing so.

Last month's CPI report overview, unrevised, although most graphs are updated, is here.

If you're wondering why the graphs look weird, the graph calculates percentages from the index and doesn't round. The actual data from the BLS report does round to one decimal place. In other words, 0.05% is rounded to 0.1%.

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