US consumer inflation rose less than expected in September, setting the stage for a nearly certain Federal Reserve interest rate cut next week to boost the economy amid weak job growth and tariff uncertainty.
The consumer price index (CPI) rose by a 3pc annual pace, after rising by 2.9pc in August, the Bureau of Labor Statistics (BLS) said Friday. The gain in September was below the 3.1pc median estimate of economists surveyed by Trading Economics.
Core inflation, which strips out volatile food and energy, rose at a 3pc annual pace in September, also below the analysts' estimates for a 3.1pc gain.
The CME's FedWatch tool, after the inflation report, showed a 96.7pc probability the Federal Reserve will cut its target rate by a quarter point at its next meeting next week. The Fed signaled in September two likely quarter points cuts in the last two meetings of the year and Fed chair Jerome Powell has recently highlighted the risks of lower employment growth more than concerns over inflation, while also citing uncertainty over the impacts of President Donald Trump's tariff wars.
The BLS, whose chief Trump fired in August following reports of dire employment revisions, released the report during the government shutdown, which has barred most government reporting, to meet Social Security mandates.
"Inflation in September smashes economists' expectations AGAIN — with prices holding steady. President Donald J. Trump's Golden Age is here to stay," the White House said on social media.
The energy index rose by an annual 2.8pc in September, quickening from 0.2pc in August The gasoline index fell by 0.5pc after falling by 6.6pc the month prior. The food index rose by 3.1pc through September, slowing from 3.2pc through August. The shelter index rose by 3.6pc over the year, unchanged.
Services less energy services, viewed as a core services measure, rose by 3.5pc, easing from 3.6pc in August.
On a monthly basis, the CPI rose by 0.3pc in September after a 0.4pc gain in August and a 0.2pc gain in July. Core prices rose by 0.2pc in September after a 0.3pc gain the prior month.
