The BLS released the September CPI report and it’s not good. Inflation rose.

Consumer Price Index Summary

CONSUMER PRICE INDEX - SEPTEMBER 2024

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis, the same increase as in August and July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.4 percent before seasonal adjustment.

The index for shelter rose 0.2 percent in September, and the index for food increased 0.4 percent. Together, these two indexes contributed over 75 percent of the monthly all items increase. The food at home index increased 0.4 percent in September and the food away from home index rose 0.3 percent over the month. The energy index fell 1.9 percent over the month, after declining 0.8 percent the preceding month.

The index for all items less food and energy rose 0.3 percent in September, as it did the preceding month. Indexes which increased in September include shelter, motor vehicle insurance, medical care, apparel, and airline fares. The indexes for recreation and communication were among those that decreased over the month.

The all items index rose 2.4 percent for the 12 months ending September, the smallest 12-month increase since February 2021. The all items less food and energy index rose 3.3 percent over the last 12 months.

The energy index decreased 6.8 percent for the 12 months ending September. The food index increased 2.3 percent over the last year. 

The chart below (AI generated) shows inflation over 12 months and where the troublesome inflation is coming from and most are labor intensive.

The chart here (AI generated) shows when the increases were over the last month.

It will be interesting to see how the Fed reacts to this in November’s FOMC meeting. Our trading strategy for now consists of buying PUTS on SPY into next year as we expect a volatile market.

Stay tuned, stay profitable and stay solvent…