US September CPI 2.4% y/y versus 2.3% expected

Price increases in September outpaced expectations, while jobless claims rose unexpectedly, largely due to Hurricane Helene and the Boeing strike, the Labor Department reported Thursday.

The consumer price index (CPI), which tracks the cost of goods and services across the U.S. economy, climbed 0.2% for the month on a seasonally adjusted basis. This brought the annual inflation rate to 2.4%, both figures coming in 0.1 percentage point higher than projected by Dow Jones.

The annual inflation rate was slightly lower than August's 2.5%, marking the lowest level since February 2021.

When excluding food and energy costs, core inflation rose 0.3% in September, pushing the annual core rate to 3.3%. Both core figures were also 0.1 percentage point above forecasts.

In a separate report, jobless claims hit a 14-month high, indicating potential weakness in the labor market despite September’s strong nonfarm payroll numbers. However, much of the increase is linked to the hurricane and strike disruptions.

More than three-quarters of the inflation rise came from a 0.4% increase in food prices and a 0.2% rise in shelter costs, according to the Bureau of Labor Statistics. These gains offset a 1.9% drop in energy prices.

Other contributors included a 0.3% increase in used vehicle prices, a 0.2% uptick in new vehicle costs, a 0.7% rise in medical care services, and a 1.1% surge in apparel prices.

Stock market futures declined after the report, while Treasury yields showed mixed movements.

This report arrives as the Federal Reserve has begun to lower benchmark interest rates. Following a half-percentage point cut in September, further rate reductions are anticipated, though the timing and scale remain uncertain.