(CN) – American consumer prices were unchanged last month, signaling low inflation pressures that could spur another interest rate cut by the Federal Reserve.
The consumer price index, a measure of inflation that tracks changes in what Americans pay for a wide range of products, is up 1.7% from a year ago.
Gas prices dropped 2.4% in September, contributing to an overall 1.4% drop in energy costs, the Labor Department reported Thursday.
Food costs rose by 0.1% last month and are up 1.8% over the past year, while costs for housing and medical care services increased by 0.3% and 0.4%, respectively. Prices for new and used vehicles declined.
Not counting the volatile food and energy categories, core consumer prices increased just 0.1% in September and are up 2.4% from a year ago.
Inflation has consistently stayed below the Federal Reserve’s 2% annual target, as the U.S. entered its 11th consecutive year of expansion this summer.
The persistently low inflation, along with President Donald Trump’s trade war with China and global growth fears, could lead the central bank to cut interest rates again on Oct. 30, after doing so in late July and again last month.
Many experts predict a third rate cut, even with core inflation measuring above 2% in September.
The Fed’s benchmark short-term rate, which influences consumer and business loans from mortgages to credit cards and home equity lines of credit, is currently in a range of 1.75% to 2%.