Could be an indication that inflation is starting to cool
Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, compared with estimates of 0.5% and 6.5%.
Medical care services declined 0.6%, apparel prices fell 0.7% and a 2.4% decline in used vehicle prices helped bring down the inflation figures.
Even with the decrease in inflation, it is still well about the 2% target established by the Federal Reserve, and costs still remain high in many categories. For example, shelter costs, which make up about one-third of the CPI, rose 0.8% for the month, the largest monthly gain since 1990, and up 6.9% from a year ago, their highest annual level since 1982. Also, fuel oil prices increased 19.8% for the month and are up 68.5% on a 12-month basis.
The food index rose 0.6% for the month and 10.9% annually, while energy was up 1.8% and 17.6%, respectively.
Real average hourly earnings declined 0.1% for the month and were down 2.8% on an annual basis, according to the BLS.
Earlier this month, the central bank approved its fourth consecutive 0.75 percentage point increase, taking its benchmark rate to a range of 3.75%-4%, the highest level in 14 years. Experts expect the Fed to continue raising, though at a possibly slower pace ahead before the fed funds rate tops out around 5% early next year.