US September Inflation Shows Marginal Increase

US consumer-price index climbed 0.1 percent in September after decreasing 0.2 per cent in August, the latest sign of modest U.S. inflation pressures amid concerns of a global slowdown.

According to a report by US Labor Department, over the past year, costs increased 1.7 per cent, the same as in the 12 months through August.

The mild inflation also means Social Security and disability payments will increase just 1.7 per cent for 2015. The government uses the figures to calculate the annual cost-of-living increase for payments made to nearly 64 million Americans. The increase the Social Security Administration announced matched an earlier Labor Department estimate.

The figure is based on the change in a slightly different price index over the past year. The mild gain marks the third straight year that seniors and other beneficiaries received less than a 2 per cent increase.

The Fed has a 2 per cent target for consumer inflation, though the central bank prefers a separate measure calculated by the Commerce Department. That reading was up 1.5 per cent

in August from a year earlier, and has undershot the Fed’s goal for more than two years.

Tame inflation suggests the Fed has flexibility to keep rates low without risk of the economy overheating. Low-interest rate policies are intended to encourage businesses and consumers to spend, and thus stimulate growth.