Key inflation rate hits 2.1% in September, as expected, closing in on Fed target
Inflation increased slightly in September and moved closer to the Federal Reserve’s target, according to a Commerce Department report Thursday.
Inflation increased slightly in September and moved closer to the Federal Reserve’s target, according to a Commerce Department report Thursday.
The personal consumption expenditures price index showed a seasonally adjusted 0.2% increase for the month, with the 12-month inflation rate at 2.1%, both in line with Dow Jones estimates. The Fed uses the PCE reading as its primary inflation gauge, though policymakers also follow a variety of other indicators.
Fed officials target inflation at a 2% annual rate, a level it has not achieved since February 2021. The September headline rate was down 0.2 percentage point from August.
Though the headline number showed the central bank nearing its goal, the inflation rate was at 2.7% excluding food and energy, after the so-called core measure increased 0.3% on a monthly basis. The annual rate was 0.1 percentage point higher than forecast but the same as in August.
The move in inflation was tilted toward services prices, which increased 0.3%, while goods prices decreased 0.1%, the fourth outright deflation figure in the past five months for the category. Housing prices eased off their pace, rising 0.3%. Energy goods and services fell 2%.
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