Import Price Inflation Slows in September, Keeping Fed Rate Hike Prospects Alive

Import prices rose just 0.1% in September, much lower than the expected 0.5% gain. This is the third straight monthly increase.

Excluding fuel, import prices fell 0.2% for the second month in a row. Non-fuel import prices haven't risen since February.

Energy import prices jumped 4.4% in September, the fourth straight monthly increase, driven by higher petroleum and natural gas costs.

The 12-month rate of import price inflation was -1.7% in September, the smallest decline since February, indicating a pause in the steady drop in inflationary pressures.

The data hints that the Fed may need to do more to get inflation on a firmly downward trajectory, as inflation trends have stabilized rather than continued declining recently.