Core CPI: A Closer Look
The Core Consumer Price Index (CPI), which excludes volatile food and energy prices, experienced a slight uptick, rising from 3.2% in August to 3.3% in September 2024. While modest, this increase suggests subtle inflationary pressures that follow a steady decline earlier in the year.
Trend Overview:
The core CPI started the year at 3.9% in January and generally declined over the months, reflecting easing inflationary forces. However, the recent rise signals that inflation is not entirely under control. Contributing factors could include wage growth and persistent supply chain disruptions.
Economic Dynamics:
Interestingly, the Phillips curve, which posits an inverse relationship between inflation and unemployment, shows limited applicability in the current climate. Both core CPI and unemployment rates remained relatively stable, hinting that inflationary trends may be driven by external influences like productivity improvements or global economic shifts rather than domestic labor market conditions.
