CPI up 3.0% in Sept after shutdown delay, markets eye Fed cut

The Bureau of Labor Statistics on Friday released a delayed consumer price index report showing U.S. inflation rose 3.0 percent year over year in September, up from 2.9 percent in August, and 0.3 percent from the prior month. The release, moved back by the federal government shutdown, was produced after some BLS staff were recalled so the Social Security Administration could calculate next year’s cost of living adjustment.

Core inflation, which excludes food and energy, also measured 3.0 percent on an annual basis and increased 0.2 percent month to month, slightly below economists' forecasts. The headline and core readings came in about a tenth of a percentage point below consensus expectations, a gap that financial markets interpreted as easing pressure on interest rates ahead of the Federal Reserve’s policy meeting next week.

Several components helped shape the September reading. Gasoline prices rose 4.1 percent from August and were a principal driver of the monthly headline gain, while energy overall increased 1.5 percent on the month. Food prices edged up 0.2 percent, with grocery prices climbing 0.3 percent month to month and 2.7 percent year over year. Shelter costs, which...