WASHINGTON (Reuters) -U.S. consumer prices increased slightly less than expected in September as a surge in the cost of gasoline was partially offset by a sharp moderation in rents, keeping the Federal Reserve on track to cut interest rates again next week.

Consumer inflation last month also was restrained by a slowdown in the pace of price increases for airfares, hotel and motel rooms as well as cheaper used cars and trucks, the report from the Labor Department showed on Friday. But tariffs on imports continued to raise prices for apparel, appliances, furniture and bedding, and sporting goods. 

The costs of gardening and home care services for the elderly and invalids also increased. Some economists have warned that the Trump administration's immigration crackdown is leading to higher prices for these services.

The report was published despite an economic data blackout caused by the U.S. government shutdown in order to help the Social Security Administration calculate its 2026 cost-of-living adjustment for millions of retirees and other benefits recipients, who will get a 2.8% increase.

It was initially due on October 15 and the White House warned October's inflation report might not be published for the first time ever because the shutdown had halted data collection.

"This inflation print is a sigh of relief for the Fed," said Olu Sonola, head of U.S. economic research at Fitch Ratings. "The tariff passthrough generally remains muted, as the focus shifts squarely to a weakening labor market. This will be framed as an insurance cut, with hopes that by December the shutdown is over and the Fed has a clearer read on jobs." 

The Consumer Price Index rose 0.3% last month after climbing 0.4% in August, the Labor Department's Bureau of Labor Statistics said. The BLS said CPI data collection was completed before the shutdown. Still, the statistical agency used imputations to fill in missing information, with the share rising to 40% from 36% in August. A 4.1% jump in the price of gasoline was the main driver of the rise in the CPI. 

Food prices rose 0.2% after accelerating 0.5% in August. Grocery store food prices increased 0.3% amid a 0.7% surge in the cost of cereals and nonalcoholic beverages. 

Beef prices rose 1.2% after shooting up 2.7% in August. They increased 14.7% compared to the same period in 2024, driven in part by droughts in prior years that reduced the national herd and raised the cost of feed. Coffee prices dipped 0.1% after surging 3.6% in August. Prices were 18.9% higher compared to September 2024, reflecting the impact of drought and tariffs.

Rising costs for beef and coffee have angered Americans who already were frustrated by higher food prices. The Trump administration has responded by quadrupling the country's low-tariff imports of Argentine beef.

In the 12 months through September, the CPI increased 3.0% after advancing 2.9% in August. Economists polled by Reuters had forecast a monthly increase in the CPI of 0.4% and a 3.1% rise on a year-over-year basis.

Excluding the volatile food and energy components, the CPI gained 0.2% after rising 0.3% in August. Slowing rent inflation accounted for the moderation in the so-called core CPI. 

Owners' equivalent rent edged up 0.1%, the smallest gain since January 2021, following what economists described as abnormal rises in some cities in August.

Prices for hotel and motel rooms increased 1.3% after rising 2.3% in the prior month. The cost of airline tickets increased 2.7% after soaring 5.9% in August. Households faced increased costs for services in industries reliant on migrant labor.

The cost of caring for invalids and the elderly at home shot up 7.0% on a monthly basis and jumped 11.6% from a year ago. Gardening and lawn care services surged a record 13.9% from a year ago, while the cost of motor vehicle repair increased 11.5%.

Though the import tariff passthrough has been gradual as businesses worked through inventory accumulated prior to Trump's imposition of broad duties and absorbed some of the taxes, prices for apparel rose 0.7%. Appliance prices increased 0.8%, while furniture and bedding cost 0.9% more.

Stocks on Wall Street rallied to record highs. The dollar was flat. Longer-dated U.S. Treasury yields were mixed. 

INVENTORIES HAVE BEEN DRAWN DOWN 

Economists estimated consumers so far have absorbed about 20% of the import duties. 

They said businesses have refrained from passing on the full costs of tariffs to consumers at the expense of hiring, now a focus of the U.S. central bank, which is expected to lower its benchmark overnight interest rate by another 25 basis points to the 3.75%-4.00% range next Wednesday.

Inventories were drawn down in the second quarter and retailers like Walmart said they were seeing costs rise as they replenished stock at post-tariff price levels.

"While many businesses have absorbed cost pressures using pre-tariff inventories and narrower margins, these buffers are gradually eroding," said Gregory Daco, chief economist at EY-Parthenon. "We anticipate a cumulative shock from tariffs totaling 0.8 percentage point by early 2026."

The Fed tracks the Personal Consumption Expenditures price indexes for its 2% inflation target. Based on the CPI data, economists estimated core PCE inflation rose 0.2% in September, translating to a 2.9% year-on-year gain.

The ongoing shutdown will, however, delay the release of that data. The second-longest shutdown in history is raising worries over the quality of future inflation reports, given the suspension of collection efforts. 

Consumer price data is collected throughout the month, the bulk of it physically, and the shutdown means more than two-thirds of the October data is already missing. 

The White House in a statement said it had "learned there will likely NOT be an inflation release next month for the first time in history - depriving policymakers and markets of critical data and risking economic calamity." 

During the 2013 government shutdown, about 75% of the CPI data for the month of October was collected. The BLS is already dealing with resource constraints because of budget and staffing cuts that have led to the suspension of data collection for portions of the CPI basket in some areas across the country.

Former BLS Commissioner Erica Groshen said time was running out for the government to produce the October CPI report.

"I think it's almost inevitable now, given that it's now the 24th of the month," Groshen said. "The BLS is understaffed dramatically compared to what it was in 2013, so the resilience isn't there, in addition to the time not being there."