Key Fed inflation rate hits 2.1% in September, as expected

Key Fed inflation rate hits 2.1% in September, as expected


Key Fed inflation rate hits 2.1% in September, as expected

Inflation increased slightly in September and moved closer to the Federal Reserve’s target, according to a Commerce Department report Thursday.

The personal consumption expenditures price index showed a seasonally adjusted 0.2% increase for the month, with the 12-month inflation rate at 2.1%, both in line with Dow Jones estimates. The Fed uses the PCE reading as its primary inflation gauge, though policymakers also follow a variety of other indicators.

Fed officials target inflation at a 2% annual rate, a level it has not achieved since February 2021. The September headline rate was down 0.2 percentage point from August.

Though the headline number showed the central bank nearing its goal, the inflation rate was at 2.7% excluding food and energy, after the so-called core measure increased 0.3% on a monthly basis. The annual rate was 0.1 percentage point higher than forecast but the same as in August.

The report comes with markets betting heavily that the Fed will cut its benchmark short-term borrowing rate when it meets next week. In September, the Fed slashed the rate by a half percentage point, a move virtually unprecedented during an economic expansion.

Policymakers have expressed confidence that inflation is heading back to target while at the same time showing concern over the state of the labor market despite most indicators showing that hiring is continuing and layoffs are low.

A separate report Thursday morning reinforced the notion that companies are mostly hanging onto their workers.

Initial filings for unemployment benefits totaled 216,000 for the week ending Oct. 26, a decrease of 12,000 from the previous period’s upwardly revised level, according to the Labor Department. The total was also below the 230,000 forecast.

Despite worries over inflation, the Commerce Department report showed income and spending held up during the month.

Personal income increased 0.3%, slightly higher than the August number and in line with expectations. Consumer spending rose 0.5%, topping the outlook by 0.1 percentage point.

In yet another data point Thursday, the Bureau of Labor Statistics reported that the employment cost index increased 0.8% in the third quarter, 0.1 percentage below forecast. On a 12-month basis, the index, which measures wages, salaries and benefits, increased 3.9%, compared to a 2.4% increase in the consumer price index, another widely followed inflation measure.

This is breaking news. Please check back for updates.



Source

Stocks making the biggest moves midday: MP Materials, Alibaba, Protagonist Therapeutics & more
World

Stocks making the biggest moves midday: MP Materials, Alibaba, Protagonist Therapeutics & more

Check out the companies making the biggest moves midday: Rare earth stocks — The group rose broadly after President Donald Trump said China was holding the world “captive” over the minerals, threatening countermeasures. MP Materials traded 13% higher along with USA Rare Earth . Magnificent Seven — Megacap tech stocks tumbled Friday after Donald Trump […]

Read More
CPI inflation report will be released by Labor Department, while other data is delayed by shutdown
World

CPI inflation report will be released by Labor Department, while other data is delayed by shutdown

A large US flag is seen on the facade of the Department of Labor headquarters building in Washington DC, United States on September 8, 2025. Celal Gunes | Anadolu | Getty Images The Labor Department will bring back staff to work on a key consumer inflation report despite the ongoing federal government shutdown, CNBC has […]

Read More
U.S. crude oil falls 4% after Trump-China trade flare-up threatens to slow global growth
World

U.S. crude oil falls 4% after Trump-China trade flare-up threatens to slow global growth

Oil prices were little changed in early Asian trade on Friday after falling more than 1% in the previous session. Chunyip Wong | E+ | Getty Images U.S. crude oil fell 4% on Friday, after President Donald Trump threatened China with higher tariffs in retaliation for Beijing imposing stricter export controls rare earth minerals. U.S. […]

Read More