US consumer inflation cooled last month — though slightly less than expected — according to government data published Thursday, providing further evidence that price pressures are easing ahead of November’s presidential election.

The consumer price index (CPI) slowed to 2.4 percent in September from a year ago, down from 2.5 percent in August, the Labor Department said in a statement.

This was slightly above the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

There was also some cause for concern for the Federal Reserve as it looks to cut interest rates: a measure of inflation that strips out volatile food and energy costs rose slightly to 3.3 percent, up from 3.2 percent in August, buoyed by a jump in the transportation services index last month.

Monthly headline inflation rose by 0.2 percent, while core inflation also exceeded forecasts to increase by 0.3 percent.

Despite the “slight upward surprise relative to what we’re expecting,” the inflation picture isn’t all bad, Oxford Economics’ deputy chief US economist Michael Pearce told AFP.

Given “the broader trend in services inflation, I think I’m still confident in the view that that’s going to continue to trend lower over the next 12 months,” he said.

– Top concern for voters –

The economy has remained a top concern for voters going into the upcoming presidential election, in which Democratic Vice President Kamala Harris is running against former president Donald Trump, a Republican.

Both candidates have talked up their record in government in recent months, while criticizing their opponent’s economic plans.

“We keep making progress, with inflation returning to pre-pandemic levels, 16 million jobs created, lower interest rates and low unemployment,” Lael Brainard, the White House national economic advisor, said in a statement.

In a speech in Detroit on Thursday, Trump blamed the Fed — the independent US central bank — for the “hotter” September inflation data.

“It was too big a cut, and everyone knows that was a political maneuver that they tried to do before the election,” Trump said. The former US president has previously indicated he believes the commander-in-chief should have a “say” over interest rates.

“But they did the wrong thing,” Trump continued, adding — without evidence — that “inflation has started to rise,” as a result of last month’s rate cut.

Peace from Oxford Economics painted a more nuanced picture.

“If you focus on just the last few months, the economy’s I think doing quite well, and would be supportive of the incumbent party,” he told AFP.

“But if you focus on the past three and a half, four years, you know, what we have seen is a big drag on real incomes, sluggish growth in terms of real disposable incomes,” he added. “And that’s obviously a political liability for the Democrats.”

‘Benign’ inflation outlook

While inflation has eased toward the Fed’s long-term target of two percent, the labor market has shown some signs of cooling in recent months, causing policymakers to refocus their attention on the employment side of the bank’s dual mandate.

Against this backdrop, the Fed voted last month to cut interest rates by half a percentage point and penciled in an additional half point of cuts this year.

The fundamental inflation outlook “remains benign,” economists at Pantheon Macroeconomics wrote in a note to clients on Thursday.

“The September CPI report came in slightly hotter than expected, but not enough to meaningfully change the outlook for US inflation,” economists at Wells Fargo wrote in an investor note.

The data support “a more measured pace of rate cuts,” said Pearce.

“I think they’re still confident that inflation is heading down, but obviously that, you know, we will see noisy reports like today’s,” he added. “It’s going to be a bumpy process. It’s not a glide path down to two percent.”

Futures traders currently assign a probability of roughly 80 percent that the Fed will cut interest rates by an additional quarter percentage point in November, and place a similar likelihood on a further cut of the same size at December’s meeting, according to data from CME Group.