(fxcue news) - The Commerce Department on Thursday released its report on U.S. personal income and spending in the month of September, which includes the Federal Reserve's preferred readings on consumer price inflation. The report said the personal consumption expenditures (PCE) price index rose by 0.2 percent in September after inching up by 0.1 percent in August. The modest increase matched economist estimates. The monthly increase by the PCE price index came as prices for services rose by 0.3 percent, more than offsetting a 0.1 percent dip by prices for goods. The Commerce Department said energy prices tumbled by 2.0 percent during the month, while food prices climbed by 0.4 percent. The annual rate of growth by the PCE price index slowed to 2.1 percent in September from 2.3 percent in August, which was also in line with expectations. Prices for goods slumped by 1.2 percent compared to the same month a year ago, but prices for services surged by 3.7 percent. The report also said the core PCE price index, which excludes food and energy prices, climbed by 0.3 percent in September after rising by 0.2 percent in August. The increase was in line with estimates. Meanwhile, the annual rate of growth by the core PCE price index in September was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to slow to 2.6 percent. "The year-over-year core PCE print indicated a 2.7% increase suggesting that the Fed is still on a bumpy course in this last mile to quell inflation and declare victory," said Quincy Krosby, Chief Global Strategist for LPL Financial. She added, "Although a 25-basis point move lower at the next Fed meeting is expected the Fed will need to acknowledge that with still resilient consumer spending, higher wages from a series of successful strikes, and a solid labor market, they will need to adopt the "gradual" approach towards lowering rates until there's a comfort level within the FOMC that inflation isn't poised to continue edging higher." The Commerce Department also said personal income increased by 0.3 percent in September after rising by 0.2 percent in August. The growth matched economist estimates. Disposable personal income, or personal income less personal current taxes, also climbed by 0.3 percent in September after increasing by 0.2 percent in August. Personal spending grew by 0.5 percent in September after climbing by 0.3 percent in August. Spending was expected to rise by 0.4 percent. Excluding price changes, personal spending rose by 0.4 percent in September following a 0.2 percent uptick in August. With spending climbing by more than income, personal saving as a percentage of disposable personal income dipped to 4.6 percent in September from 4.8 percent in August.