Alternative Metrics Indicate US Inflation Reaching Two-Year High of 2.6% in September

Alternative inflation metrics suggest a significant uptick in U.S. inflation, with PriceStats data indicating a 2.6% year-over-year increase in September, marking the highest level in two years. This represents the fifth consecutive monthly rise, driven primarily by surging prices in specific goods categories. The findings, highlighted in a recent tweet from The Kobeissi Letter, underscore growing price pressures in the economy.

PriceStats, which collects daily online retail prices, noted that the increase was largely attributable to sharply higher costs for goods such as furniture and household equipment. Michael Metcalfe, head of Macro Strategy at State Street Markets, which distributes PriceStats data, previously stated that the PriceStats series has shown an over 80% correlation with the U.S. Bureau of Labor Statistics (BLS) inflation measures over the past five years, positioning it as a reliable indicator. PriceStats' methodology involves scraping online prices from over 1,500 multi-line retailers daily, covering more than 40 million products.

Further supporting this trend, OpenBrand data revealed that the Consumer Price Index (CPI) for Durable & Personal Goods jumped 0.6% month-over-month last month, its fastest monthly increase since June. This surge was predominantly led by higher costs for personal care products and communication devices. Ralph McLaughlin, chief economist at OpenBrand, attributed some of these increases to the impact of tariffs, describing them as "little air pockets that cause the plane to go up" in an otherwise downward trajectory for inflation.

The acceleration in price increases, as indicated by these alternative data sources, suggests a broader inflationary trend impacting consumer goods. While official CPI data for September is typically released later, these real-time metrics provide an early glimpse into the evolving economic landscape. The Federal Reserve, which is expected to lower interest rates, will likely monitor such data closely for signs of persistent inflationary pressures, especially as the holiday shopping season approaches.