US CPI to rise to 3.6% in September, Truflation forecasts

Truflation has forecast that September U.S. headline inflation will rise to 3.6% from August’s 3.4%, while annual core inflation will hold at 2.4% as weaker hiring and easing housing costs restrain consumer price pressure.

Truflation, in its Oct. 9 inflation report, attributed the expected increase in headline CPI to gasoline, tariffs and higher costs entering the production chain. Ahead of Wednesday’s Bureau of Labor Statistics release, the company expects housing, food and discretionary durable goods to provide some relief.

Against the market consensus listed in the report, Truflation’s September estimates are lower for both headline and core inflation. The consensus puts annual headline CPI at 3.7%, with a 0.6% monthly increase, and annual core CPI at 2.5%, with prices rising 0.2% monthly.

For core prices, Truflation projects a 0.23% monthly increase, compared with the 0.3% August reading recorded in its report. Its headline forecast of 0.48% would exceed August’s 0.4% monthly increase.

US CPI pressure has concentrated in gasoline

Within Truflation’s September data, gasoline prices rose 4.8% from August and 32.1% from a year earlier, making fuel the main source of headline inflation pressure. The report identifies energy as the most volatile part of its forecast.

The company’s earlier findings showed the pressure building before September. In a Sep. 10 report, crypto.news covered Truflation’s August inflation forecast, which recorded gasoline increases of 3.4% monthly and 27.6% annually.

At the time, Oliver Rust, Truflation’s head of data, attributed the difference between headline and core inflation to fuel costs.

“The principal reason headline inflation is running above core is the renewed pressure from energy,” Rust said in that September coverage.

Outside gasoline, the latest report recorded a 0.4% monthly increase in clothing and footwear prices. Communications prices climbed 2.8%, which Truflation linked to changes in cellular-plan pricing.

Food moved in the opposite direction, falling 0.1% during September as grocery prices declined 0.5%, according to the report. Housing also provided relief: the accompanying forecast notes put its monthly decline at 0.2%.

In its assessment, Truflation said consumer inflation has not yet spread decisively across spending categories, even as energy and imported goods create renewed cost pressure.

Higher import costs threaten further goods inflation

Further back in the supply chain, Truflation’s report cited August producer inflation of 5.4% annually and a 7% annual increase in import prices. Its own core goods inflation measure reached 1.94%.

Among manufacturers, the September ISM prices index reached 77.9, according to the document. Truflation linked the risk of additional consumer goods increases toward year-end to tariffs, freight charges and expensive production inputs.

In the earlier September coverage, the company described several ways importers could delay passing tariff costs to shoppers, including accepting lower margins, selling older inventory, changing suppliers and negotiating prices.

As businesses replace inventory purchased before tariff increases, Rust said in that coverage that more of the higher costs could reach retail prices. Truflation’s earlier analysis found the strongest relationship between effective tariff rates and core goods inflation when tariff changes preceded prices by about four months.

For the fourth quarter, the latest report projects headline inflation around 3.3%–3.4%, with monthly increases of roughly 0.2%–0.4%. Although goods prices may rise gradually, the company expects services inflation to remain persistent rather than accelerate sharply.

Cooling employment could restrain services inflation

On the services side, Truflation cited a September ISM prices reading of 74.0, indicating that input costs remain elevated in its assessment. The same report pointed to payroll growth slowing to 29,000 and unemployment rising to 4.2%.

With annual pay growth moderating to 4%, the company said labor costs may exert less pressure on services prices. Its forecast therefore pairs rising supply costs with weaker employment and wage growth.

The employment figures were also covered in an Oct. 2 report on September’s weak payroll growth. That coverage reported the 29,000-job increase and 4.2% unemployment rate, alongside Federal Reserve Vice Chair Philip Jefferson’s comments that future policy changes should depend on incoming data, the economic outlook and the balance of risks.

For policymakers, Truflation said additional interest-rate increases cannot directly resolve energy or import supply disruptions. However, the company argued that higher costs spreading into core goods and services could justify keeping policy restrictive.

In its October forecast, Truflation expects headline CPI to rise 0.3% monthly and 3.7% annually. The company projects core inflation at 0.2% monthly and 2.4% annually.

Bitcoin analysts have tied rate expectations to core inflation

For U.S. investors with Bitcoin exposure, Bitfinex analysts have identified the September CPI release as a test of interest-rate expectations before the Fed’s Oct. 27–28 meeting.

In Oct. 6 coverage of slowing Bitcoin ETF buying, the analysts said softer core inflation would weaken the case for a December rate increase. Steady or rising core inflation, combined with firm consumer spending, would strengthen that case in their assessment.

The same analysis recorded weekly U.S. spot Bitcoin ETF inflows of $241.1 million for Sep. 28–Oct. 2, down from approximately $2.39 billion the previous week. Bitfinex said Bitcoin’s recovery required fresh spot purchases, with ETF investors showing less appetite to buy around their estimated average entry price.

On borrowing costs, the analysts cited five-year Treasury yields above 5% and ten-year yields above 5.2%, describing both as 19-year highs that restricted participation in risk assets.