On October 12th, at 9:30 PM Japan Time, the U.S. Consumer Price Index (CPI) for September was released.
I will provide a brief summary of the content as usual. Consumer prices in September slightly exceeded expectations. After a period of decline until July, prices started to rise again from August, and September's level was on par with August. The expected increase was +3.6%, and the actual figure slightly surpassed this projection. The Core CPI, which excludes volatile items such as energy and fresh food, came in at +4.1% on an annualized basis, a slight decrease from the previous month's +4.3%. This was in line with expectations. While the overall Consumer Price Index slightly exceeded expectations, the Core CPI has been following the expected downward trend.
However, a closer look at the components suggests some signs of potential future inflationary pressure. Breaking down the details, energy prices declined by -0.5% on an annualized basis. While August saw a significant increase of +5.6%, September's increase was more moderate at +1.5%. This change is attributed to a slowdown in the rise of gasoline prices, which soared by +10.6% in August but increased by only +2.1% in September. This moderation is influenced by factors such as a temporary halt in the rise of crude oil prices. Used car prices recorded a significant drop at -8.0% on a year-over-year basis, with a monthly drop of -2.5%, extending the decline that has been ongoing since last year. Services showed a year-over-year increase of +5.7%, with a monthly increase of +0.6%. This indicates a recent acceleration in service price growth, following a period of slower growth around June. Additionally, rent prices remained high, with a year-over-year increase of +7.2%.
Monthly rent increases also accelerated, rising by +0.6% compared to +0.3% in August, indicating that rental market prices continue to climb. In summary, while the overall numbers remained stable from the previous month and the Core CPI met expectations, there are indications that service and rent prices are experiencing increased monthly growth, which could sustain inflation rates at current levels. Since there hasn't been significant wage growth as seen in employment statistics, it is unlikely that service prices will significantly increase. Instead, inflation rates may stabilize around current levels. With the current Consumer Price Index at 3.7%, still well above the Federal Reserve's target of 2%, it suggests that the results of this Consumer Price Index align with the Federal Reserve's recent statements.
Therefore, it wasn't a result that significantly deviated from the Fed's previous assumptions, and it's unlikely to have a major impact on the market. Regarding the Federal Open Market Committee (FOMC) meeting scheduled for November, the outlook for a rate hike during this meeting has diminished. Given these factors, it's unlikely that there will be a significant strengthening of the U.S. dollar or a substantial increase in the USD/JPY exchange rate. This summarizes the content of the Consumer Price Index and its implications for future monetary policy and market trends.