Official figures show that US consumer prices outside food and energy rose by less than expected in September to post their smallest gain in six months.
The Labor Department said its core consumer price index edged up 0.1% as prices for new cars were flat and rents rose modestly. The index increased 0.2% in August and economists had expected a similar rise in September.
Overall consumer prices increased 0.3% last month, as expected, after advancing 0.4% in August.
The moderate rise in consumer prices offered assurance that inflation pressures remained in check despite a sharp rise in wholesale prices last month.
It also suggested the Federal Reserve had some wriggle room for further monetary policy easing, should the economic recovery falter.
Core consumer prices last month were restrained by new motor vehicle costs, which were unchanged for a third straight month. This probably reflects a normalisation in supplies after the March earthquake in Japan disrupted production.
The annual rate of overall inflation in September was 3.9%, up from 3.8% in August, while the core annual rate was unchanged at 2%.
A 2.9% increase in the price of petrol pushed overall consumer prices last month. Food prices gained 0.4% after increasing 0.5% in August.
US housing starts rebound in September
US housing starts rebounded sharply in September, the government said today in a report offering a rare bit of positive news on the embattled property sector.
Builders started privately-owned new homes at a seasonally adjusted annual pace of 658,000 units, marking a 15% increase from August, the Commerce Department said. In August, housing starts fell for a second month in a row, by 7%.
The September jump in housing starts was led by a 53.4% rise in construction of buildings with at least five units. Starts of single-family homes, the largest part of the sector, rose just 1.7%.
However, the Commerce Department also reported building permits, which indicate future construction activity, fell 5% in September from the prior month to a rate of 594,000.
The construction industry, a key pillar of the economy, has been mired in a deep slump since the 2008-2009 recession, despite ultra-low interest rates, as tepid gross domestic product growth and high unemployment keep buyers on the sidelines.
