NEW YORK (CNNMoney.com) -- Consumer prices are up slightly over last year driven by climbing food and energy costs, but still lower than policymakers would like.
The Consumer Price Index, a key measure of inflation, rose 1.1% over the last 12 months ending in September, the Bureau of Labor Statistics said Friday, unchanged from the previous month. Any number above zero means prices are rising, but a rate around 1% is considered slow growth.
Shortly ahead of the report, Federal Reserve Chairman Ben Bernanke gave a speech on the "low inflation environment," saying inflation trends will likely "remain subdued for some time."
"Inflation is running at rates that are too low" Bernanke warned. "The risk of deflation is higher than desirable."
The possibility of rising inflation had also been a concern amid speculation of further easing of U.S. monetary policy. But the low CPI reading dissuaded some of those fears, lending more support to predictions that the Fed will buy more long-term Treasurys in November, said Mark Vitner, senior economist with Wells Fargo.
"There really isn't a whole lot of reason to worry about inflation right now, and that gives the Fed a free hand to do whatever they need to do," Vitner said.
The CPI report was also closely watched by policymakers this month, because the government used the data to determine Social Security beneficiaries will not get a cost of living increase in 2011.
The so-called core CPI, which strips out volatile food and energy prices, rose at a 0.8% annual rate in September, down slightly from 0.9% in August.
Food prices posted their largest increase since October 2008, rising 1.4% during the year. Energy prices rose 3.8%.
For September, CPI rose just 0.1% month over month, lower than expectations. Prices were expected to have increased 0.2% in September, after climbing 0.3% the previous month, according to consensus estimates from Briefing.com.
Apple is likely to post huge growth in sales and profits thanks to the popularity of the iPhone 6. Here's all the numbers to keep an eye on in the report. More
A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More