US inflation eased in August as energy prices cooled significantly.
Consumer prices rose 0.2% last month, down from July's 0.4% gain. Annual inflation in August was 2.8%, still above the Federal Reserve's 2% target.
Energy costs rose just 0.3% in August compared to the 2.9% rise seen in July, as global oil prices fell back from record highs near $78 a barrel.
The Federal Reserve held interest rates at 5.25% last month, but economists have not ruled out further rises.
Fed chairman Ben Bernanke has consistently warned of the dangers of inflationary pressures in recent months, and August's 2.8% annual inflation rate is higher than July's 2.7%.
Excluding food and energy prices, the Labor Department said its core consumer price index inflation guide also rose 0.2% in August, the same as July's gain.
Analysts broadly welcomed the latest inflation figures, saying they still expected the Fed to keep interest rates on hold later this month but raise them again towards the end of the year.
"If you do the maths it means inflation is OK and there is no reason for the Fed to raise rates at the next meeting," said Robert Macintosh, chief economist at Eaton Vance Management.
"It's a little bit disappointing, but I wouldn't read too much into it because the numbers do tend to bounce around a little bit," said Scott Brown, chief economist at Raymond James & Associates.
"The economy has slowed down from what we have seen earlier in the year, but it is still consistent with growth overall."
A further sign that while US economic growth has slowed, the economy is still healthy has come in the form of the latest consumer sentiment index from the University of Michigan.
The closely watched guide found that consumer sentiment rose to 84.4 in September from August's 82.