“US CPI data will likely show further disinflation in September,” read the headline on one mainstream financial media outlet’s lead CPI story Thursday.

Guess what? The inflation update out of the US didn’t show “further disinflation.” The core print for September was 0.312% MoM, faster than August’s pace. On a 12-month basis, core price growth was 3.3%, up from the prior month’s annual rate.

Economists expected 0.2% — 0.24% to be exact — from the MoM reading. To be fair, forecasters weren’t badly off base. The Bloomberg screengrab below shows you the distribution.

As BMO’s Ian Lyngen detailed just prior to the release, “only 1% of economists [were] calling for a 0.1% MoM increase.” Just over half saw 0.2% MoM, and more than four in 10 expected 0.3%. “The balance of risks,” Lyngen wrote, “is clearly skewed to the upside versus the 0.2% consensus.”

That said, and as you can see from the standard deviation lines on the bell curve, 0.312% did count as a meaningful upside surprise. This was a “real” 0.3%. Not just an upwardly-rounded two-handle.

As the figure below shows, we’re moving in the wrong direction, albeit not on a trajectory that’ll alarm Fed officials. Yet. Nobody will be alarmed yet. But when considered with the blowout September jobs report, consecutive upside surprises to nominal wage growth and the BEA’s upwardly-revised income figures, there’s a risk that Fed fence-sitters in last month’s 25 versus 50 debate become Miki converts in the event the labor market data continues to hold up.

September was the third consecutive month during which core inflation accelerated. Last month’s MoM rate was double July’s and more than quadruple June’s.

Do note: The September FOMC minutes, despite confirming that the Committee is by and large unconcerned about a serious upturn in realized inflation (i.e., they consider the odds of a meaningful re-acceleration to be quite long), Jerome Powell didn’t have unequivocal buy-in for the half-point cut the Fed ultimately delivered. There were several officials who would’ve been just fine with — and might’ve even preferred — a more “traditional” 25bps increment.

The headline — i.e., the all-items gauge — likewise overshot in Thursday’s release, rising 0.2% MoM and 2.4% YoY. Consensus expected 0.1% and 2.3%, respectively. Grocery prices rose 0.4% in September from August. That was the briskest MoM rate since January of 2023. The electricity gauge rose the most since March.

Used vehicle prices rose from August (as widely tipped), apparel prices posted their largest MoM increase since April, transportation services the largest increase since March and medical services the quickest pace since January (and the second-quickest in two years).

The saving grace was the shelter component, which rose just 0.2%. The OER print was 0.333% MoM and the rent of primary residence series came in at 0.279%. Those aren’t terrible readings, and if you were looking for a silver lining, the shelter gauges were surely it.

I realize the big jump in jobless claims on Thursday morning may get more attention from markets (and maybe even from the Fed), but consider: The CPI-derived “supercore” inflation prints (i.e., core services stripping out shelter) were 0.55% (core services less shelter) and 0.40% (core services ex-rent/OER). The former was more than double August’s pace. Those readings, and particularly the former, won’t work.

Draw your own conclusions. If you ask me, a Fed that’s insufficiently attentive to this release is a Fed that’s incurring some boiling frog risk.