The U.S. inflation rate edged higher than expected in September, while jobless claims surged to their highest level since August 2023, according to data released by the Labor Department on Thursday.
The Consumer Price Index (CPI), a broad measure of the cost of goods and services, rose 0.2% for the month, pushing the annual inflation rate to 2.4%. Both figures exceeded forecasts by 0.1%.
This marks a slight decrease from the 2.5% inflation rate recorded in August and is the lowest rate since February 2021. Core inflation, which excludes volatile food and energy prices, rose 0.3% in September, with the annual rate climbing to 3.3%, also above expectations.
Simultaneously, initial jobless claims for the week ending October 5 surged unexpectedly, reaching a seasonally adjusted 258,000—33,000 higher than the previous week and the largest figure since August 2023.
The increase has been linked to disruptions caused by Hurricane Helene, which hit the southeastern U.S. in late September, and a Boeing workers’ strike in Michigan.
Inflationary pressures were driven largely by rising food and shelter costs, despite a 1.9% drop in energy prices. Food prices increased by 0.4%, with notable jumps in egg prices, up 8.4%, and butter, up 2.8%. Shelter costs, which account for over a third of the CPI calculation, rose by 0.2% in September and 4.9% year-over-year, signaling a potential easing of long-term price pressures.
The Federal Reserve, which lowered its benchmark interest rate by half a percentage point in September, is expected to continue easing rates, although the pace of future cuts remains uncertain.
Traders in futures markets have increased bets that the Fed will lower rates by a further 0.25% at its November 6-7 meeting, with the likelihood now estimated at 86%.
While inflation remains higher than the Fed's 2% target, policymakers, including Federal Reserve Chair Jerome Powell, have expressed confidence that price pressures are easing. However, they have also noted emerging risks in the labour market, with the recent jobless claims data reflecting potential weaknesses.