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, and the smallest annual rise since February 2021. Measured from month to month, prices increased 0.2% from August to September, the Labor Department reported Thursday, the same as in the previous month.
Excluding volatile food and energy costs, however, "core" prices, a gauge of underlying inflation, remained elevated in September, driven up by rising costs for medical care, clothing, auto insurance and airline fares. Core prices in September were up 3.3% from a year earlier and 0.3% from August.
Economists closely watch core prices, which typically provide a better hint of future inflation.
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Taken as a whole, the September figures show that inflation is steadily easing back to the Fed's 2% target, even if in an uneven pattern. That decline suggests the Fed will likely keep cutting its benchmark interest rate this year, with most economists expecting quarter-point reductions in November and December.
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