The latest CPI report came in hotter than expected, with Core CPI rising 0.24% mom in September, bouncing back from the 0.1% rise in August, and keeping the Y/Y rate steady at 4.0% (4.03% unrounded) yoy. Headline inflation rose 0.41% mom, above the 0.3% consensus estimate, which bumped up Y/Y to 5.4% from 5.3%. Energy prices soared 1.3% mom and food spiked to 0.9% mom.
Taking a closer look at the report, BofA’s Alex Lin writes that “a major development in this report was a notable acceleration in OER to 0.43% mom and rent of primary residence to 0.45% from its prior 0.2-0.3% mom trend.” To be sure, this is hardly a surprise, with this website warning last month that the surge in rents meant an OER spike was just a matter of time.
Lin echos this today and writes that “given strength in the high frequency rent data, we believed it