Inflation rate hit 3.0% in September, lower than expected, long-awaited CPI report shows

Prices that people pay for a variety of goods and services rose less than expected in September, according to a Bureau of Labor Statistics report Friday that is the only official economic data allowed to be released during the government shutdown.

The consumer price index showed a 0.3% increase on the month, putting the annual inflation rate at 3%. Economists surveyed by Dow Jones had been looking for respective readings of 0.4% and 3.1%. The annual rate reflected a 0.1 percentage point uptick from August.

Excluding food and energy, core CPI showed a 0.2% monthly gain and an annual rate also at 3%, compared to respective estimates of 0.3% and 3.1%, the latter being unchanged from a month ago. Core CPI on a monthly basis had posted 0.3% gains in both July and August.

A 4.1% jump in gasoline prices was the largest contributor to a report that otherwise showed inflation pressures fairly muted. Food prices showed a 0.2% increase. Commodity prices overall rose 0.5%. On an annual basis, energy was up 2.8% and food rose 3.1%.

Within the food index, prices for meat, poultry, fish and eggs surged 5.2% in the past year, while nonalcoholic beverages increased 5.3%. In energy, while electricity (up 5.1%) and natural gas (11.7%) prices pushed higher over the past year, gasoline actually fell 0.5% during the period.

Shelter costs, which comprise about one-third of the weighting in the CPI, rose just 0.2% and were up 3.6% from a year ago. Services excluding shelter costs also were 0.2% higher.

New vehicles saw a 0.8% increase, but used cars and truck prices fell 0.4%.

Stock market futures added to gains following the release, while Treasury yields were slightly negative.

“Inflation might not be slowing but it's not surprising to the upside anymore,” said David Russell, global head of market strategy at TradeStation.

The report provides a glimpse into the state of the U.S. economy at a time when all other data releases have been suspended.