Inflation Reaches Lowest Point Since February 2021
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WASHINGTON — Inflation in the United States dropped last month to its lowest point since it first began surging more than three years ago, adding to a spate of encouraging economic news in the closing weeks of the presidential race.
Consumer prices rose just 2.4% in September from a year earlier, down from 2.5% in August and the smallest annual rise since February 2021. Measured from month to month, prices increased 0.2% from August to September, the Labor Department reported Oct. 10, the same as in the previous month.
But excluding volatile food and energy costs, “core” prices, a gauge of underlying inflation, remained elevated in September, driven higher by rising costs for medical care and car insurance. Core prices in September were up 3.3% from a year earlier and 0.3% from August. Economists closely watch core prices, which typically provide a better hint of future inflation.
The improving inflation picture follows a mostly healthy jobs report released last week, which showed that hiring accelerated in September and that the unemployment rate dropped from 4.2% to 4.1%. The government has also reported that the economy expanded at a solid 3% annual rate in the April-June quarter. Growth likely continued at roughly that pace in the just-completed July-September quarter.
CPI for all items rises 0.2% in September; shelter and food up https://t.co/dJyJeKmvth #CPI #BLSdata — BLS-Labor Statistics (@BLS_gov) October 10, 2024
For the Fed, last week’s much-stronger-than-expected jobs report fueled some concern that the economy might not be cooling enough to slow inflation sufficiently. The central bank reduced its key rate by an outsized half-point last month, its first rate cut of any size in four years. The Fed’s policymakers also signaled that they envisioned two additional quarter-point rate cuts in November and December.
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