One chart provides the inflation breakdown for September 2024.

• In September 2024, the annual consumer price index increased by 2.4%, as reported by the Bureau of Labor Statistics.
• Inflation declined amid a pullback in gasoline prices and moderation in housing inflation.
• Despite some difficulties, including issues with groceries and car insurance, overall things went smoothly.

In September, inflation decreased due to lower gasoline prices and other declining price pressures, including housing, resulting in a positive impact on consumers' finances, as indicated by the consumer price index.

The U.S. Bureau of Labor Statistics reported that the consumer price index, an important inflation indicator, increased by 2.4% in October 2023 compared to September 2023.

The figure represents a decrease from 2.5% in August, indicating a slowdown in price growth. Additionally, it is the lowest annual reading since February 2021.

The September CPI figure was slightly higher than economists predicted, however.

Mark Zandi, the chief economist at Moody's, stated that while there were some problematic areas, such as an increase in categories like clothing, car insurance, and groceries, these seem to be one-time occurrences.

"Zandi stated that while the trend on inflation is positive, this month's increase was a blip and unlikely to continue."

The Consumer Price Index (CPI) tracks changes in the prices of a diverse range of products and services, including car repairs, peanut butter, and living room furniture.

The rate of inflation has decreased significantly from its peak of 9.1% in June 2022, and is now moving closer to policymakers' long-term target of around 2%.

Sarah House, senior economist at Wells Fargo Economics, stated that there has been a significant improvement over the past two years.

In recent months, economists have been more concerned about a slowdown in the labor market than about inflation.

The Federal Reserve, which raised interest rates to combat inflation in early 2022, began cutting them last month to ease pressure on the labor market and economy.

Prices fall at the gas pump

A pullback in gasoline prices has helped inflation throttle back.

In September, the cost of a gallon of regular gasoline was $3.21, a 16% decrease from the same time last year, as reported by the U.S. Energy Information Administration.

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During September, CPI data shows that gasoline prices dropped by approximately 4%.

Crude oil is refined into gasoline. The price of oil decreased to a nearly three-year low in September due to weak demand in China and concerns about oil supply exceeding demand. However, the price increased in October due to factors such as heightened geopolitical risk in the Mideast and Hurricane Milton in the Gulf Coast.

Annual food inflation is 'fairly tame'

The rate of food inflation in the past year has been relatively low, according to House.

Since September 2023, the Consumer Price Index (CPI) reports a 1.3% increase in grocery prices.

Agricultural commodities, such as corn, wheat, coffee, and soybeans, have either decreased or become more stable in price, according to House.

Labor costs have decreased due to slow wage growth, allowing businesses to offer more price incentives and promotions to consumers, House said.

The monthly grocery inflation rate increased from 0% in August to 0.4% in September.

Zandi stated that she believes it won't continue in the future.

The pricing of individual food items can be influenced by their own supply and demand dynamics.

The increase in egg prices from August to September was more than 8%, and since September 2023, they have risen by 40%, mainly due to the outbreak of avian flu, a deadly disease affecting chickens and other birds, according to economists.

Housing inflation is declining

Economists stated that housing is the largest contributor to the Consumer Price Index (CPI) and has been the main obstacle in achieving the target inflation rate.

"According to House, "That part is crucial because its impact on overall and core inflation can be significant.""

Despite a gradual decline in CPI shelter inflation, which encompasses rental prices and a comparable measure for homeowners, many economists are still perplexed since real estate data indicates that the growth in average rents for new tenants has been subdued for approximately two years.

In September, the monthly rate of shelter inflation decreased from 0.5% in August to 0.2%.

The latest CPI report contains among the most encouraging signals, according to economists.

"Zandi stated that shelter inflation is now moderating, which is a crucial aspect of the CPI."

'Slower to recede'

Housing falls into the "services" category of the economy.

The rate of inflation for goods has decreased significantly since the pandemic, as the imbalance in supply and demand is gradually corrected, according to economists.

Despite recent efforts, services inflation has not decreased significantly, according to House.

Although largely due to shelter, other categories have also increased.

The cost of motor vehicle insurance rose 1.2% from August to September and approximately 16% since September 2023, as per the CPI.

Car insurance premiums are being raised by insurers due to the increase in new and used car prices, which heavily impacts their services.

She stated that it usually takes time for such changes to be reflected in the services side.

She stated that the rate of inflation for services was slower to reach its peak and is likely to decline at a slower pace as well.