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U.S. Inflation Slows in September to New Three-and-a-Half-Year Low

The latest inflation data from the Bureau of Labor Statistics reveals that U.S. inflation continued to ease in September, reaching its lowest point since early 2021. The Consumer Price Index (CPI), a key measure of price changes in goods and services, rose by 2.4% over the past year. This marks a slight decrease from August’s 2.5% annual rate but still exceeded economists’ expectations of a 2.3% increase.

Despite the progress, the report highlighted persistent inflationary pressures in certain areas. Monthly prices increased by 0.2%, mirroring August’s growth but surpassing projections of 0.1%. Rising food prices, driven by an outbreak of bird flu affecting egg supplies, and continued shelter-related costs contributed to the CPI’s upward movement, even as gasoline prices fell.

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Core CPI, which excludes volatile food and energy prices, increased 0.3% in September, with the annual rate rising slightly to 3.3%. While inflation has broadly decelerated, particularly in housing, which saw its slowest growth since early 2022, economists caution that challenges remain. Factors like extreme weather, disease outbreaks, and geopolitical tensions could lead to short-term spikes in costs.

The Federal Reserve will likely scrutinize this mixed inflation data as it considers potential adjustments to interest rates in its upcoming meeting. Housing inflation, a significant component of CPI, showed signs of easing but remains a factor in overall inflation persistence.

With upcoming economic reports expected on wholesale inflation and the Federal Reserve’s preferred Personal Consumption Expenditures price index, the inflation outlook is cautiously optimistic. However, temporary price surges and global events could still affect the path to stable inflation.

Source: CNN

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