U.S. inflation slowed more than expected in September as consumer prices eased from their prior monthly level, government data showed Friday. The core annual inflation rate declined to the lowest point in nearly five decades, raising worries of deflation and supporting expectations for another round of quantitative easing by the Fed.
The Consumer Price Index, the most closely watched indicator of inflation, rose 0.1 percent in September after a pick up of 0.3 percent in August, the Labor Department said. Leading gains were energy and food costs, with the latter jumping 0.3 percent to mark its biggest increase since October 2008. Energy prices rose 0.7 percent, which was down from the 2.3 percent increase in August. Read more
Many Federal Reserve policy-makers are apparently ready to ease monetary policy "before long" to stimulate inflation and lift the struggling U.S. economy, according to minutes taken during the Fed’s September 21 session of the Federal Open Market Committee (FOMC).
The FOMC’s official statement last month noted that inflation was "somewhat below" desired levels. The minutes from the meeting elaborate and provide background:
"Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the Committee’s mandate, they would consider it appropriate to take action soon."