Consumer inflation rose 0.2% in September, more than analysts' expectations

Oct. 10 (UPI) -- Consumer prices saw their smallest annual hike in more than three years in September but spooked markets as the monthly increase was greater than analysts expected, according to a Thursday report from the Bureau of Labor Statistics.

The Consumer Price Index inflation showed inflation rose 0.2% from August and 2.4% on an annual basis.

"The all items index rose 2.4% for the 12 months ending September, the smallest 12-month increase since February 2021, the BLS said in a statement. "The all items less food and energy index rose 3.3% over the last 12 months.The energy index decreased 6.8% for the 12 months ending September. The food index increased 2.3% over the last year."

The September inflation number was 0.1% above the consensus expectation of Dow Jones economists. On an annual basis inflation was 0.1% lower in September compared to August.

U.S. markets were down in early trading after the news with the Dow Jones Industrial Average falling 108.12 points, or 0.25%, while the S&P 500 dropped 0.22% and the Nasdaq Composite was down 0.2%.

The BLS said September CPI inflation for shelter rose 0.2% and food increased by 0.4%, together accounting "over 75% of the monthly all items increase."

Inflation has slowed substantially from its peak two years ago.

In September five of the six major grocery store food group indexes increased for the month. Meats, poultry, fish and eggs were up 0.8% in September.

Fruits and vegetables were up 0.9% in September.

Energy costs fell 1.9% in September after dropping 0.8% in August. Gasoline prices were down 4.1% in September.

Reacting to the slowing inflation, the Federal reserve cut interest rates in September and is expected to cut them again in 2024.

The Dow closed at an all-time high following the September cut.