US consumer inflation eases to 2.4% in September

US consumer inflation cooled further last month. Photo: Frederic J. BROWN / AFP
Source: AFP

US consumer inflation cooled slightly less than expected last month, according to government data published Thursday, providing further evidence that price pressures are easing ahead of November's presidential election.

The consumer price index (CPI) slowed to 2.4 percent in September from a year ago, down from 2.5 percent in August, the Labor Department said in a statement.

This was slightly below the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

There was also some cause for concern for the Federal Reserve as it looks to cut interest rates: A measure of inflation that strips out volatile food and energy costs rose slightly to 3.3 percent, up from 3.2 percent in August, buoyed by a jump in the transportation services index last month.

Monthly headline inflation rose by 0.2 percent, while core inflation also exceeded forecasts to increase by 0.3 percent. Both monthly figures also exceeded expectations.

Despite the "slight upward surprise relative to what we're expecting," the inflation picture isn't all bad, Oxford Economics' deputy chief US economist Michael Pearce told AFP.

"I think the broader trend in services inflation, I think I'm still confident in the view that that's going to continue to trend lower over the next 12 months," he said, referring to easing of services inflation from 0.2 percent in August to 0.2 percent in September.

Top concern for voters

The economy has remained a top concern for voters going into the upcoming presidential election, in which Democratic Vice President Kamala Harris is running against the Republican former president Donald Trump.

Both candidates have looked to talk up their record in government while criticizing their opponent's economic plans.

While inflation has eased toward the Federal Reserve's long-term target of two percent, the labor market has shown some signs of cooling in recent months, causing policymakers to refocus their attention on the employment side of the bank's dual mandate.

Against this backdrop, the Fed voted last month to cut interest rates by half a percentage-point and penciled in an additional half point of cuts this year.

Thursday's inflation data "supports a more measured pace of rate cuts," Pearce from Oxford Economics said.

"I think they're still confident that inflation is heading down, but obviously that, you know, we will see noisy reports like today's," he added. "It's going to be a bumpy process. It's not a glide path down to down to two percent."

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Source: AFP