Inflation in US reaches lowest point in 3 years

WASHINGTON — Inflation in the United States dropped last month to its lowest point since it began surging more than three years ago.

Consumer prices rose just 2.4% in September from a year earlier, down from 2.5% in August, marking the smallest annual rise since February 2021. Month-to-month, prices saw an increase of 0.2% from August to September, which remained consistent with the previous month’s figures, as reported by the Labor Department.

However, when excluding volatile food and energy costs, “core” prices—a gauge of underlying inflation—remained elevated in September, influenced by rising costs for medical care, clothing, auto insurance, and airline fares. The core prices in September were up 3.3% from a year earlier and saw an increase of 0.3% from August.

Economists closely monitor core prices, as they typically provide a clearer indication of future inflation trends.

The overall figures for September demonstrate that inflation is gradually easing back toward the Federal Reserve’s 2% target, albeit in an uneven manner. This decline suggests that the Fed may continue its strategy of reducing the benchmark interest rate this year, with many economists anticipating quarter-point reductions in both November and December.

As inflation dynamics evolve, these trends will be vital for consumers, businesses, and policymakers alike. Understanding the shifts in inflation can help the public prepare for potential changes in the economic landscape in the coming months.