Thursday’s report of CPI for the month of September was in-line with consensus expectations at -0.2%. The core reading, however, was slightly hotter than expectations at a level of 0.2% versus consensus expectations of 0.1%. On a y/y basis, headline CPI is unchanged over the last year, meaning that inflation, as measured by overall CPI, is non-existent and near its lows of the current economic expansion (top chart). Looking only at core CPI, concerns over the potential for a continued decline in the rate of inflation look a lot less worrisome. Stripping out food and energy, inflation levels have actually been ticking higher. After September’s reading, the core level of CPI rose to 1.9%, which is the highest level since July 2014 (bottom chart). While y/y core CPI has yet to break its downtrend, it is a lot closer to doing so than the headline CPI.