US consumer prices rose by an annual 3.7pc in September for a second month even as core inflation slowed to its lowest in two years.
The gain in September was slightly above most forecasts. So called core inflation, which strips out the more volatile food and energy prices, rose at a 4.1pc pace, slowing from a 4.3pc rate in the period through August, the Bureau of Labor Statistics said today.
Inflation has slowed from a peak 9.1pc annual rate in June 2022 as the Federal Reserve has hiked its target rate to 5.25-5.5pc from near zero since March 2022. This is its steepest course of tightening since the 1980s, as it seeks to slow the economy to tamp down prices. The Fed has signaled one more quarter point hike is likely this year, even though fed funds futures markets signal no further hikes this year.
Services less energy services rose at a 5.7pc rate, down from a 5.9pc rate in the period through August.
The energy index fell by 0.5pc for the 12 months ending September, and the food index increased 3.7pc over the last year. The shelter index rose by 7.2pc, the largest contributor to the overall monthly gain.
For the month, inflation slowed to 0.4pc in September from 0.6pc in August. Energy rose by 1.5pc in September after a 5.6pc gain in August, with gasoline slowing to 2.1pc from 10.6pc. Shelter costs accelerated to 0.6pc from 0.3pc. Food was steady at 0.2pc for a third month. New vehicles rose by 0.3pc for a second month.
By Robert Willis
