The 0.3% September CPI rise
The 0.3% September CPI rise with a 0.1% core price increase undershot estimates, and the headline rounded up from a 0.292% increase alongside a particularly lean 0.112% core price rise. The downside surprise mostly reflected a 0.7% apparel price drop and a flat medical care service price reading after a 1.0% (was 0.9%) August surge, though analysts also saw a sturdy 0.4% rise for owners' equivalent rent after five consecutive 0.3% gains, alongside the expected 2.9% energy price rise. Analysts expect a 0.4% CPI gain in October with a 0.2% core price rise thanks to an estimated 7% gasoline price surge. The headline y/y increase should rise to 1.7% in October from 1.5% in September, while the "core" y/y rise remains at September's 2.2%, following the 2.3% cycle-high in August. Analysts expect a 0.3% headline PCE chain price gain with a 0.1% core price rise that matches today's CPI data. Analysts trimmed our Q3 PCE chain price estimate to 1.5% from 1.6%.