Inflation Research Brief
Climbing Core CPI Inflation Poses
Implications for Regulators and Investors
Distinct trends forming among CPI measures. Descending from a June peak of 9.0 percent, the headline Consumer Price Index rose by a year-over-year rate of 8.2 percent in September. Much of this recent downshift has been driven by declining gasoline prices, a trend that could prove temporary. The war in Ukraine, OPEC production cutbacks and a series of domestic maintenance issues are limiting oil supplies, while the ability to pull from the Strategic Oil Reserve may soon close as stockpiles dwindle. At the same time, other consumer costs are climbing faster. Core CPI, which omits the energy category along with food, jumped 6.6 percent over the past 12 months, a 40-year high. The ascending costs for services, including transportation and medical care, drove much of this increase. While the recent downturn in gas prices was undoubtedly helpful to consumers, elevated inflation will continue until core pressures are tamped down.