Inflation better than expected in September, government says in shutdown report

By the numbers: CPI increased to 3% in the 12 months through September, compared to the 2.9% the previous month. Economists expected it to tick up to 3.1%.

• Core CPI, which strips out food and energy, rose 3%, down from 3.1% in August.
• On a monthly basis, CPI rose 0.3%, while the core measure that strips out food and energy costs rose 0.2%, both cooling from the prior month.

Zoom in: The better-than-expected report comes after several months that showed prices rising at a quicker rate across several categories, including for goods most likely to be impacted by higher tariffs.

• The government said gasoline prices — which rose by 4% in September alone — were the biggest factor contributing to overall inflation last month.

Between the lines: Employees at the nation's critical statistics offices, including the BLS, are furloughed as the government shutdown drags on.

• The White House called back roughly 100 employees at the BLS to compile the September CPI report.
• The government is legally mandated to release this report in a timely manner, given its role in calculating the January cost-of-living adjustment (known as a COLA) for Social Security recipients.

What to watch: The lack of economic data leaves the Fed in a tough spot ahead of its interest rate decision next week.

• The central bank is expected to cut rates by a quarter-percentage point again — a bid to protect the weakening labor market. But some officials might be wary to continue to cut rates without key economic data as the shutdown drags on.
• Inflation remains above the 2% target and officials are concerned about how President Trump's trade policy might be weighing on inflation.

Editor's note: This story has been updated with additional details on the report.