Consumer prices edged higher last month after a summertime spike in gasoline and energy prices leveled off, the government reported on Thursday.
The report demonstrated that inflation is still a remote concern for the American economy, even as the dollar tumbles against other global currencies and jittery investors clamor to buy barrels of oil and bars of gold. The figures backed up the Federal Reserve’s view that inflation will remain low as the economy grapples with high unemployment and low consumer demand.
The Labor Department’s consumer price index rose 0.2 percent in September, its smallest rise since July, when prices were flat for the month. Consumers paid less for food, but slightly more for energy, gasoline and clothing.
New car prices bounced back from declines a month earlier, when they fell amid a flurry of discounted buying as car buyers flocked to dealerships to take advantage of the government’s “cash for clunkers” rebate program. Prices for new automobiles rose 0.4 percent, and used-car prices climbed for a second month.
The so-called core rate of inflation, which excludes volatile food and energy prices, also rose 0.2 percent.
Overall, prices in September were 1.3 percent lower than a year earlier, when high gasoline and oil prices plummeted during the financial crisis, dragging down the costs of food, transportation and other costs of living.
Housing costs, which make up a substantial portion of the overall consumer price index, fell 0.3 percent in September, reflecting rising residential vacancies and cheaper hotel rates across the country.
The changes in consumer prices lined up with economists’ expectations, and reflected the view of Fed bankers, who believe that excess slack in the economy and its long path toward recovery will keep a damper on inflation.
Minutes from the Fed’s latest meeting in September highlighted that view: “Most participants anticipated that slack in both labor and product markets would be substantial over the next few years, leading to subdued and potentially declining wage and price inflation.”
In another economic report, the Labor Department said that first-time claims for jobless benefits fell to a seasonally-adjusted 514,000 from an upwardly revised 524,000 the previous week. The fifth decline in six weeks was below Wall Street economists’ forecasts of 525,000, according to Thomson Reuters.
The four-week average, which smoothes fluctuations, fell for a sixth consecutive time to 531,500.
