Core consumer prices that exclude the more volatile categories of food and energy were flat in September compared to August for the second consecutive month and for the fourth month since March. On an annual basis core prices are up 0.8 percent, the government said.
In a speech in Boston, Federal Reserve Chairman Ben Bernanke said, "It seems likely that inflation trends will remain subdued for some time."
That may seem a boon to consumers, but inflation falling into deflation tends to stall the economy further as consumers wait to make purchases and profits fall. The Fed's target rate for inflation is 2 percent.
Bernanke in a speech at the Federal Reserve Bank of Boston said, "Although the attainment of price stability after a period of higher inflation was a landmark achievement, monetary policymaking in an era of low inflation has not proven to be entirely straightforward."
Central banks have learned "price stability (has) become two-sided," he said. "Inflation can be too low as well as too high."
In September, energy prices rose 0.7 percent, while food prices rose 0.3 percent compared to a month ago. Annually, food prices are up 1.4 percent. Energy prices in the past 12 months are up 3.8 percent, including an 11.8 percent annual jump in fuel oil.
Gasoline prices are up 5.1 percent for the year, the government said.