Worst Inflation in 25 Years

The government reported that inflation had its biggest jump in 25 years in September. The Consumer Price Index rose from 196.2 to 198.8 for a 1.22% increase. On an annualized basis, that comes to 15.7%. That’s the biggest jump since March 1980.
The good news is that the “core rate” of inflation, which excludes food and energy, rose only 0.1% in September. That was below Wall Street’s forecast of 0.2%. The culprit for the higher non-core rate was energy. Energy prices rose 12% in September, the biggest jump ever. Gasoline prices led the way with a 17.9% increase.
So far, it looks like Wall Street is pleased that core inflation is still so low. The 10-year Treasury has rallied and the yield is back below 4.5%. Oil is now below $62. The stock market looks to open higher as well.

Posted by on October 14th, 2005 at 9:26 am


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