U.S. consumer prices rose modestly last month, suggesting that while some inflation risks linger, they probably wouldn’t stand in the way of any interest-rate reductions by the U.S. Federal Reserve Board.

Meanwhile, U.S. home builders slowed groundbreakings to the weakest pace in 14 years during September.

The consumer price index rose 0.3% in September, the U.S. Labor Department said today, reversing August’s 0.1% decline. The core CPI, which excludes volatile food and energy prices, advanced 0.2% for a fourth-straight month.

The figures broadly matched Wall Street forecasts.

Consumer prices were up 2.8% from a year ago. The core CPI was up 2.1% compared to the same month a year ago, unchanged from August’s rate.


Meanwhile, U.S. housing starts plunged 10% to a seasonally adjusted 1.191 million annual rate, after falling 3.2% in August to 1.327 million, the U.S Commerce Department said today. Originally, Commerce reported August starts 2.6% lower at 1.331 million.

The sharp drop surprised even Wall Street, which expected a decline — but a smaller one. Economists had forecast a 4.2% drop to a 1.275 million annual rate. The construction pace of 1.191 million set in September was the lowest since 1.083 million during March 1993. Year-to-year, housing starts were 31% below the level in September 2006.