You are here
Key US inflation index slows again in September
[WASHINGTON] A closely watched measure of US inflation slowed for the second straight month in August as growth in food and energy prices softened, the government reported Monday.
However, the Federal Reserve is still likely to raise interest rates again in December despite moderating price pressures. Central bankers also are keeping a wary eye on steady job creation and unemployment that is verging on 50-year lows.
US consumers continued to spend, buying more autos and paying for health care, in a sign that consumption continues to support strong economic growth, according to Commerce Department figures.
The Fed's preferred inflation measure, the Personal Consumption Expenditures price index, slowed last month to two per cent compared to September of last year, marking the second straight monthly decline.
Prices for gasoline, gas and electricity rose more slowly than they did in summer months while the food index gained 0.5 per cent for the third month in a row.
Excluding volatile food and fuel categories, however, the PCE index also rose two per cent, matching the Fed's target for the fifth month in a row.
Compared to August, the price index rose 0.1 per cent for the fourth month in a row, matching analyst expectations. Excluding food and fuel, the monthly increase saw a bump of two tenths to 0.2 per cent, moderately overshooting forecasts.
With a noted rise in wages, personal incomes rose 0.2 per cent to US$17.7 trillion, slowing from August's 0.4 per cent gain and the smallest increase since June of 2017.
But consumer spending grew by a faster 0.4 per cent to US$14.1 trillion, driving Americans' personal savings rate down to its lowest level since December.