Skip to footer

Consumer prices barely rise. Will Fed keep rates low longer?

US consumer prices rose marginally in September as energy costs fell broadly, painting a weak inflation picture that should give the Federal Reserve ample room to keep interest rates low for a while. Consumer prices edged up 0.1 percent last month after declining 0.2 percent in August. 

|
Katie Alaimo/Kalamazoo Gazette-MLive Media Group/AP/File
Emily Collins orders mini donuts at the Night Market at the Kalamazoo Farmers Market in Kalamazoo, Mich. Consumer prices rose just 0.1 percent in September according to figures released by the Labor Department Wednesday, Oct. 22, 2014.
  • By Staff Reuters

| Washington

US consumer prices rose marginally in September as energy costs fell broadly, painting a weak inflation picture that should give the Federal Reserve ample room to keep interest rates low for a while.

The Labor Department said on Wednesday its Consumer Price Index edged up 0.1 percent last month after declining 0.2 percent in August. Economists polled by Reuters had forecast consumer prices being flat in September.

The CPI increased 1.7 percent in the 12 months through September after a similar rise in August. The CPI-W index, which is used to make adjustments for Social Security payments rose 1.7 percent in the third quarter from the year earlier.

Inflation has waned in recent months after quickening in the second quarter, in part as a strengthening dollar and slower economic growth in China and the euro zone dampen imported price pressures.

Weak inflation and a recent global equities market sell-off could see the U.S. central bank in no rush to start raising its benchmark overnight interest rate, which it has kept near zero since December 2008.

Financial markets now expect the first interest rate hike in the fourth quarter of 2015 instead of the second quarter.

Stripping out food and energy prices, the so-called core CPI ticked up 0.1 percent last month after being unchanged in August. In the 12 months through September, the core CPI rose 1.7 percent after advancing by the same margin in August.

The Fed targets 2 percent inflation and it tracks an index that is running even lower than the CPI.

In September, energy prices fell for a third straight month, with gasoline prices slipping 1.0 percent after dropping 4.1 percent in August. Food prices gained 0.3 percent after rising 0.2 percent in August.

Within the core CPI, shelter costs increased 0.3 percent in September after rising 0.2 percent in August. The shelter index was up 3.0 percent in the 12 months through September, the largest gain since January 2008.

Airline fares declined for a third straight month, while prices for new motor vehicles and apparel were unchanged. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Consumer prices barely rise. Will Fed keep rates low longer?
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2014/1022/Consumer-prices-barely-rise.-Will-Fed-keep-rates-low-longer
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe