Total CPI increased 0.4% month-over-month in September (consensus 0.3%) and core CPI, which excludes food and energy, rose 0.3% (consensus 0.3%). More than half of the increase in total CPI was driven by a 0.6% increase in the index for shelter.
On a year-over-year basis, total CPI was unchanged at 3.7% while core CPI dropped to 4.1% from 4.3% for the 12 months ended in August.
The key takeaway from the report is that the headline numbers belie some otherwise encouraging inflation readings below the surface. To wit: the all items index less shelter was up just 2.0% year-over-year and the services index less rent of shelter was up 2.8% year-over-year.