US September consumer inflation rose less than expected, delayed data shows

WASHINGTON – US consumer inflation continued to heat up in September but by less than expected, according to official data published on Oct 24, nine days late because of the ongoing government shutdown.

However, the acceleration is unlikely to dim expectations of another rate cut from the Federal Reserve next week as it looks to support the flagging labour market.

The consumer price index (CPI) picked up to 3 per cent in September, accelerating from 2.9 per cent on a year-on-year basis a month earlier, the Labour Department said in a statement.

Prices rose 0.3 per cent from a month earlier.

Both the annual and monthly inflation data came in slightly below the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

A significant reason for the monthly increase came from the petrol index, which jumped 4.1 per cent between August and September.

The food index rose by a more modest 0.2 per cent, spurred by a 0.3 per cent rise in the cost of food at home.

Underlying so-called “core” inflation, excluding volatile food and gas prices, also came in below expectations at 3 per cent, the Labour Department said.

“It certainly is welcome news that we had a surprise on the downside, with shelter costs really helping us out,” KPMG chief economist Diane Swonk told AFP news agency, referring to the accommodation data in the latest inflation print.

But, she warned, goods inflation has now increased for four months in a row, adding that service sector inflation remained “somewhat sticky”.

The data provides economists and traders with some much-needed insight into the health of the world’s largest economy, with almost all other official data releases halted owing to the US government shutdown, now in its 24th day.

Policymakers on Capitol Hill

remain in a stand-off

, with Republicans so far digging in and refusing to grant the Democrats’ demands to extend subsidies that make health insurance affordable for millions of Americans.

White House press secretary Karoline Leavitt praised US President Donald Trump’s agenda for the “below market expectations” CPI data and blamed the Democrats for the ongoing shutdown – accusations that they have repeatedly rejected.

The shutdown “will likely result in no October inflation report, which will leave businesses, markets, families and the Federal Reserve in disarray”, she said in a statement.

The CPI data published on Oct 24 is an exception to the pause on official data and was released to allow the Social Security Administration (SSA) to calculate its cost-of-living adjustment for 2026.

Within minutes of the CPI release, the SSA announced that retirement benefits will rise by around US$56 (S$73) a month, starting in January 2026.

Policymakers at the US central bank are widely expected to cut rates by another 25 basis points next week, despite the September acceleration in inflation.

The move would build on the bank’s decision to implement its first rate cut of the year in September, when officials voted overwhelmingly to bring the bank’s benchmark lending rate down to between 4 per cent and 4.25 per cent.

That is because policymakers, who have a dual mandate from Congress to tackle inflation and unemployment, are currently flagging concerns about the sharp slowdown in job creation in recent months.

US job growth

came in at just 22,000 in August

, according to the most recently available data from the Department of Labour.

Futures traders see a roughly 97 per cent chance that the Fed will announce a quarter-point cut on Oct 29, lowering its benchmark lending rate to between 3.75 per cent and 4 per cent, according to CME Group data. AFP