CNN
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Inflation in America slowed further in September, hitting a new three-and-a-half-year low and reaching a pace similar to 2017 and 2018, according to new data released Thursday.

The consumer price index, which measures price changes in commonly purchased goods and services, was 2.4% in the 12 months ended September, slowing from an annual rate of 2.5% in August, according to the Bureau of Labor Statistics' latest report.

That's a smaller slowdown than economists had expected – FactSet consensus estimates were for a 2.3% rise – but inflation, as measured by the consumer price index, is at its lowest level since February 2021.

On a monthly basis, prices rose 0.2%, matching August's rise but faster than economists' forecasts of 0.1%.

A rise in food prices combined with continued housing-related price increases pushed the overall CPI higher last month, BLS said.

Excluding food and energy costs, which tend to be quite volatile, the core CPI rose 0.3% in September, bringing the annual rate to 3.3%, after being steady over the past two months was 3.2%.

The core CPI measure was expected to remain difficult for the month due to stubbornly high accommodation inflation and a handful of temporary price increases for certain categories such as insurance, accommodation costs and vehicle prices.

Still, economists say inflation is heading in the right direction as the factors that drove up prices during the pandemic have largely disappeared while demand has slowed to more normal levels.

This story is evolving and will be updated.