There is a silver lining to the de-leveraging process we have witnessed over the past few months. Price deflation has also come in the form of lower prices for consumer products and services.  This is evident especially for the month of September, as the Consumer Price Index was flat for the month. The report was a surprise, as economists were expecting a 0.2% gain in the CPI. Core CPI, which excludes energy and food prices because of their volatile nature, did gain some, albeit slightly. Core CPI increased 0.1%, below the 0.2% also expected by economists. Year-over-year, consumer prices have increased 4.9%. Core CPI gained 2.5% in the same period.

The reading was largely attributed to a decrease in consumer energy prices. Energy prices in the US fell 1.9% for the month. The index for gasoline decreased 0.6%, following a 4.2% decrease in August. New vehicle prices declined for the second straight month, falling 0.7% after a 0.6% decrease in August. Airfares also fell, declining 1.7%.

Food prices rose in September, up 0.6% after a 0.6% gain last month.

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