The 0.2 percent gain in the consumer-price index followed a 0.4 percent increase in August, as forecast, figures from the Labor Department showed. Excluding food and energy costs, the so-called core index also climbed 0.2 percent, more than anticipated and pushed up by health care and a rebound in auto prices. Rents dropped for the first time in 17 years.
The worst economic slump since the 1930s has left unemployment at a 26-year high and record levels of homes sitting vacant, signaling companies and landlords will hold the line on prices in coming months. The lack of inflation may give the upper hand to the Federal Reserve policy makers who’ve said the central bank can keep interest rates low for a long time.
Compared with a year earlier, consumer prices were down 1.3 percent. For the core index, prices climbed 1.5 percent from September 2008 after a 1.4 percent increase in the 12 months ended in August.
Energy costs increased 0.6 percent in September as the cost of gasoline climbed 1 percent.
Gasoline prices in September averaged $2.55 a gallon, compared with $2.62 in August, according to AAA. Regular pump prices so far this month have averaged $2.47.
Food prices, which account for about a seventh of the CPI, decreased 0.1 percent in September, reflecting cheaper meats and produce.
Lower food prices are dragging down revenue at some businesses. Spartan Stores Inc., which distributes groceries and runs supermarkets, said lower prices are hurting sales.
The gain in the core index was led by climbing health-care costs, which were up 0.4 percent, and a rebound in automobile prices following the expiration of the cash-for-clunkers” plan.
New vehicle prices increased 0.4 percent, while the cost of used vehicles jumped 1.6 percent. The administration’s clunkers initiative gave buyers as much as $4,500 for trading in older models for new, more fuel-efficient autos. Last month the Labor Department said those sales were considered as discounts off purchase prices.
Rents, which make up almost 40 percent of the core CPI, fell. Owners-equivalent rent, one of the categories used to track rental prices, decreased 0.1 percent, the first drop since 1992.
The CPI is the broadest of the three monthly price gauges from the Labor Department because it includes goods and services. A report yesterday showed the cost of imported goods rose 0.1 percent, less than forecast. The government is scheduled to release its wholesale-price index on Oct. 20.
Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.