Newly released data shows that inflation once again had slowed before the government shutdown delayed the release of federally produced economic statistics.
The Consumer Price Index, delayed by two weeks, increased just 1.2 percent year-over-year in September, according to a Wednesday report from the Bureau of Labor Statistics. That is the smallest increase since April, after prices had crept up toward 2 percent in the meantime.
Two percent annual inflation is the target set by the Federal Reserve, which controls the nation's money supply. Inflation far below that target could be suggestive of a slowing economy and the possibility of damaging deflation. Fed officials, who are meeting in Washington Wednesday to decide whether to make changes to the central bank's monetary policy, identified low inflation as a potential problem in September.
Core inflation, which excludes food and energy prices, was slightly higher in September, at 1.7 percent over the past year. But that rate is slightly down from the previous month, when it was 1.8 percent.
The Producer Price Index, which tallies the prices of goods and services based on their sellers, also came in low on Tuesday, decreasing for the month and increasing just 0.3 percent on the year. Excluding food and energy prices, the index was up 1.2 percent year-over-year.
In past months, Fed officials have attributed low inflation numbers to transient factors, and said that price increases will converge toward the 2 percent goal in the medium term. Over the late summer, that appeared to be the case. But, as the chart below from Econoday illustrates, the latest data casts doubt on prices behaving the way the Fed expects.