By Harriet Torry and Amara Omeokwe 

WASHINGTON--U.S. consumer prices were flat in September, as a decline in energy and used vehicle prices held down broader inflationary pressures.

The consumer-price index, which measures what Americans pay for everything from lawn care to bus fares, was unchanged in September after rising a seasonally adjusted 0.1% in August, the Labor Department said Thursday.

Excluding the volatile food and energy categories, so-called core prices rose 0.1%, moderating from a 0.3% increase in August.

Economists surveyed by The Wall Street Journal had expected consumer prices to rise 0.1% in September, and core prices to rise 0.2%.

In the 12 months through September, overall prices rose 1.7%, while core prices were up 2.4% on the year.

Economists expected a 1.8% increase in overall prices, and a 2.4% rise in core prices from a year earlier.

The weaker-than-expected CPI reading for September follows an unexpected drop in prices that businesses receive for their goods and services, potentially dealing a setback to the Federal Reserve's hopes of hitting its inflation target in coming quarters.

The producer-price index, a measure of the prices that businesses receive, fell a seasonally adjusted 0.3% in September from the previous month, its weakest reading since January, the Labor Department said Tuesday.

Thursday's report showed an index of energy prices fell 1.4% in September, led by a seasonally adjusted 2.4% drop in gasoline costs. Prices of used cars and trucks, which have been volatile in recent months, also posted a large decline, dropping 1.6% on the month.

The price index for food ticked up 0.1% from August, while shelter costs rose 0.3%.

Meanwhile wages stagnated in September. After adjusting for inflation, average hourly earnings were flat in September from the prior month and are up 1.2% from September 2018.

Recent weak inflation readings come as the Federal Reserve prepares to meet at the end of this month to deliberate the path of interest rates ahead. The central bank lowered its benchmark federal-funds rate for a second time this year in September, to its current range between 1.75% and 2%.

"Inflation is somewhat below our symmetric 2% objective but has been gradually firming over the past few months," Fed Chairman Jerome Powell said Tuesday in Denver. He didn't explicitly ratify or rebut recent market expectations of another quarter-percentage-point cut at its Oct. 29-30 meeting.

While the jobs and inflation picture for the U.S. economy has been favorable, Mr. Powell said global developments pose risks to this outlook, including from trade policy uncertainty and Britain's impending departure from the European Union.

Inflation as measured by the Fed's preferred gauge, the personal-consumption-expenditures index, has been muted in recent months.

The Commerce Department's price index for personal-consumption expenditures rose 1.4% from a year earlier in August-shy of the Fed's 2% year-over-year target. Excluding volatile food and energy costs, inflation was up 1.8% from August 2018.

The Labor Department's report on consumer prices can be found at: http://www.bls.gov/news.release/pdf/cpi.pdf

(END) Dow Jones Newswires

October 10, 2019 08:45 ET (12:45 GMT)