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Consumer Prices Rise Slightly In September

Still no sign of inflation on the horizon

By Mark Huffman
ConsumerAffairs.com

October 15, 2009

The index is down from a 0.4 percent increase in August, when rising energy costs pushed overall costs higher.

The "core" inflation rate, which strips out food and energy costs, also rose at the same 0.2 percent rate, suggesting that food and energy costs have moderated over the summer. Analysts say the recession, producing cuts in consumer spending, has kept prices in check.

"Excluding the volatile food and energy components, costs were up moderately and for the past three months they have increased at a 1.3 percent annualized pace," said Joel Naroff, who heads the economic forecasting firm Naroff Economic Advisors, in Holland, Pa. "That may seem low, and it is. But the recession was still on, even if it was ending, during the summer. That raises some questions about what inflation will be six months from now."

But Naroff sees no sign of inflation in the immediate future. He notes that food costs don't seem to be rising, while retailers are offering deals on clothing and computers. Even the cost of having fun when down, with lower recreational costs in September.

"With the economy beginning to revive, the price cutting on the part of so many consumer-dependent firms may ease," Naroff said. "That is not to say they will be raising prices, but some of the great deals just may not be made even better."

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