For the second consecutive day, the U.S. Labor Department on Friday, October 14, appeared to give manufacturers some inflation data to worry about. The department reported that its seasonally adjusted Consumer Price Index (CPI) rose 1.2% in September, by far the largest increase in recent months. The day before, the department reported the price of goods the U.S. imports rose 2.3% in September, the biggest monthly gain in nearly 15 years.
However, in September the so-called core CPI, which strips out month-to-month price changes for food and fuel from the overall CPI, posted a rather a rather benign one-tenth percent increase. And that's the number Peter Morici, a professor at the University of Maryland's Smith School of Business, chose to focus on. "The modest increase in the core CPI indicates [Federal Reserve] concerns about inflation are misplaced," he said. "Coupled with slowing automobile and other retail sales, this cooling of core inflation indicates consumers are strapped, and further interest rate increases are no longer needed," he stated.
On October 14, the U.S. Commerce Department reported that retail sales in September rose just two-tenths of a percent to a seasonally adjusted $351.5 billion, half the percentage increase economists generally expected.