–September CPI +0.1%; Core Rate Unchanged
–US BLS Confirms, No Social Security Cost of Living Hike for 2nd Year

By Denny Gulino

WASHINGTON (MNI) – The Consumer Price Index rose just 0.1% in
September despite firm gasoline prices and the core rate, unchanged for
September, for 12 months shows the smallest change since 1961.

The fact the Index did not rise in the third quarter beyond its
increase in the same quarter a year ago means that in January, there
will be no Social Security cost of living increase for the second year.
A House bill to give recipients a $250 payment has doubtful chances in
the Senate.

The Bureau of Labor Statistics Friday turned in a
below-expectations report despite seasonal adjustment factors that added
a lot of weight to several categories, including gasoline.

Without seasonal adjustment consumer prices also rose only a
tenth, but “just barely,” senior BLS analyst Steve Reed told Market News
International just prior to the report’s public release.

He also noted a “little higher food inflation” among the major
categories, with meats, poultry, fish and eggs pressuring the food index
up 0.3% and climbing 1.5% so far this year after adjustment.

Long-term, other categories have far outdistanced food, with used
cars and trucks up 12.9% over the past year. New cars have seen much
less price pressure, up just 0.5% so far this year. Medical care, a
category that once typically showed the strongest increases, has risen
just 3.4% the past year and for September rose 0.6%.

The core rate, while up just 0.8% in the past year, the least since
1961, has risen even less just this year, up 0.7%.

The direct rent index rose 0.1% in September and the owners’
equivalent rent was unchanged, part of the trend that has put the
heavily weighted shelter category on the minus side by 0.4% the past
year.

Reed said the seasonal adjustment factors for gasoline “expect
prices to go up February through May and June when they peak, then
expect them to go down for the most part the rest of the year, with a
little bounce in October and November.

So the adjustment process raised gasoline from the 1.4% decline in
September that actually happened, to a 1.6% increase.

Airline fares, heavily influenced by fuel prices, before adjustment
dropped 1.1% and after, were up 0.2%.

The 2009 cost of living increase for Social Security and many other
government transfer payments had been the highest in 25 years, 5.8%.
Since then, the CPI on which the COLA is based by law has been zero and
will remain that way next year as inflation fears continue to fail to be
realized.

Expectations in a Market News International survey centered on a
0.2% increase in the September CPI and a 0.1% rise in its core rate.

** Market News International Washington Bureau: 202-371-2121 **

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