WASHINGTON – A big drop in energy prices helped pull overall U.S. consumer prices down by an unexpectedly steep 0.5 percent in September, the government reported on Wednesday, though so-called core prices kept edging up enough to keep inflation a concern.
The Labor Department said its core consumer price index, an inflation gauge that strips out volatile food and energy costs, rose 0.2 percent in September, in line with Wall Street economists' expectations. It also matched the core price gains in August and July.
In overall prices, the 0.5 percent plunge was larger than the 0.3 percent decline that had been forecast and followed a 0.2 percent rise in August. It was the first decline since last December in prices and the largest for any month since November, when they dropped 0.7 percent.
The fresh inflation data comes days before Federal Reserve policy-makers are set to meet next week. In recent speeches, U.S. central bank officials have made it clear that they are closely monitoring inflation risks, and as a result market expectations are that interest rates will be held steady next week.
Energy prices tumbled 7.2 percent in September, their biggest decline since an 8.1 percent drop last November, following a 0.3 percent rise in August