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The latest Consumer Price Index for the 12 months ending in September showed inflation holding steady at 3.7%. the U.S. Bureau of Labor Statistics reported Thursday. 

On a monthly basis, inflation rose 0.4% in September, a slowdown from the 0.6% monthly increase in August. The index for shelter was the largest contributor to the monthly all items increase, accounting for over half of the increase. An increase in the gasoline index (+2.1%) was also a major contributor. 

While the major energy component indexes were mixed in September, the energy index rose 1.5% over the month. The food index increased 0.2% in September, as it did in the previous two months. The index for food at home increased 0.1%, while the index for food away from home rose 0.4%. 

The core CPI that excludes the more volatile food and energy indexes rose 0.3% in September, the same pace as in August. Indexes that increased in September include rent (+0.6%), owners’ equivalent rent (+0.6%) lodging away from home (+3.7%), motor vehicle insurance (+1.3%).  

Indexes for recreation, personal care, and new vehicles were up for the month, but the indexes for used cars and trucks (-2.5%) and for apparel (-0.8%) were among those that decreased over the month. 

Viewed on an annual basis, the all items less food and energy index rose 4.1% over the 12-month period that ended in September. The energy index decreased 0.5% over the last 12 months, and the food index increased 3.7%. 

The shelter index increased 7.2% over the last year, accounting for over 70% of the total increase in all items less food and energy. Other indexes with notable increases over the last year include motor vehicle insurance (+18.9%), recreation (+3.9%), personal care (+6.1%), and new vehicles (+2.5%). 

Federal Reserve officials will review the September CPI report and other economic indicators closely before their next meeting on Oct. 31-Nov. 1, when they will decide on short-term interest rates. The Fed’s goal has been to reduce inflation to 2% and it has undertaken a series of interest rate increases to cool the economy. 

The Fed last raised the federal funds benchmark interest rate in July to a 22-year high of 5.25% to 5.50%.  Although the Fed opted to forgo any further increase at its meeting last month, it has signaled the possibility of another increase before the end of the year. 

The Dow Jones Industrial Average and the S&P 500 were both flat in early trading Thursday after the CPI report was released, while the Nasdaq Composite slipped 0.2%.