US inflation slows in September on rental costs, energy

[WASHINGTON] US consumer prices rose less than expected in September, held back by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool slightly.

The Consumer Price Index increased 0.1 per cent last month after rising 0.2 per cent in August. In the 12 months through September, the CPI increased 2.3 per cent, slowing from August's 2.7 per cent advance.

Excluding the volatile food and energy components, the CPI edged up 0.1 per cent for the second straight month. The so-called core index had increased 0.2 per cent in May, June and July.

In the 12 months through September, the core CPI increased 2.2 per cent. Economists polled by Reuters had forecast both overall and core CPI climbing 0.2 per cent in September.

With the readings only slightly below what analysts expected, the inflation report will probably do little to change expectations that the Federal Reserve will raise interest rates at its December policy meeting. The US central bank has raised rates three times this year.

The Fed tracks a different inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, for monetary policy. The core PCE price index rose 2.0 per cent in the 12 months through August, holding at the Fed's 2 per cent target for the fourth straight month.

Last month, gasoline prices slipped 0.2 per cent after surging 3.0 per cent in August. Food prices were flat overall and prices for food consumed at home fell 0.1 per cent.

Owners' equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.2 per cent in September after rising 0.3 per cent in August.

REUTERS