Consumer prices saw a smaller-than-anticipated rise in September, according to government data released on Friday. This could open the door for additional interest rate cuts by the Federal Reserve and indicates that tariffs aren’t significantly impacting household expenses.
The consumer price index increased by 0.3% last month, a marked decrease from August’s 0.4%. Economists had predicted a 0.4% rise.
Year-over-year, consumer prices climbed 3.0%, slightly below the forecasted 3.1% increase.
Core prices, which exclude food and energy, went up by 0.2%, also lower than the expected 0.3% rise. Over the past 12 months, core prices are up 3.0%.
After a surge in August, food inflation eased in September. The food price index grew by 0.3% for the month, down from a 0.6% rise the prior month. Compared to last year, food prices increased by 2.7%. The cost of dining out saw a modest rise of 0.1%, compared to 0.3% in August. Year-over-year, restaurant prices jumped 3.7%.
The most significant contributor to inflation in September was energy prices, which rose 1.5% for the month and 2.8% year over year. Gasoline prices surged by 4.1% in September, though they dropped 0.5% when compared to the same month last year.
New car prices saw a slight increase of 0.2% in September, representing a 0.8% rise from the previous year. In contrast, used car prices fell by 0.4% after having increased for two consecutive months. Year-over-year, used car prices are up by 5.1%.
Apparel prices dropped by 0.1% from a year ago, despite having risen by 0.7% in September alone.
Core service prices, excluding energy services, rose by 0.2%. The annual growth rate is currently sitting at 3.5%. Shelter prices, which encompass rents and costs for owned homes, climbed by 0.2% and 3.6% respectively.
Prices for home appliances increased by 0.8%, marking a 1.3% rise compared to last year. Major home appliances saw a 0.4% monthly increase, but were down by 0.6% year-on-year. Furniture prices rose by 0.2%, representing a 3.0% annual increase. Prices for computers and smart home devices went up by 0.2% year-on-year but decreased by 0.7%. Smartphone prices, meanwhile, fell by 2.2% for the second month in a row, down 14.9% from last year.
Prices of televisions dipped by 1.1% and are down 6.0% compared to last year.
