Consumer prices rose 0.3% overall in September according to a Bureau of Labor Statistics report released this morning. This level represents a moderation from the 0.4% and 0.5% growth seen in the previous two months. Core CPI rose by a more moderate 0.1%.
Energy and food contributed most heavily to inflation seen in September, growing 2.0% and 0.4% respectively. The rise in gasoline prices was due mostly to a seasonal adjustment, as unadjusted gasoline prices fell. Additionally, the food index decelerated from its brisk pace seen so far this year.
This report suggests that inflation is set to moderate from the fast pace we have seen so far this year. This will provide the Federal Reserve more freedom to administer monetary stimulus, should conditions warrant.
Read the report.