Excluding the volatile prices of food and energy, the consumer price index, which measures prices Americans pay at the retail level, rose by a fairly modest 0.2 percent, just as it did in July and August.

The price report, and another that prefigured a further cooling of the housing market, were taken as signs that the economy was slowing gradually and that no increases in interest rates would be needed soon.

Investors responded by bidding stocks briskly upward early in the day, briefly pushing the Dow Jones industrial average above 12,000 for the first time. Robust profit reports from two technology giants also helped send stocks higher. But the rally petered out during the day, and the Dow ended the day just below 12,000.

Economists had expected a fall in consumer prices, but not so big a fall: the consensus forecast was about 0.3 percent. The core index, excluding food and energy, performed as expected; that is the measure the Federal Reserve watches most closely as it decides whether to adjust interest rates.

Still, the Labor Department reported that core consumer inflation is now running at 2.9 percent for the year — the highest level in almost 11 years.

The government also announced today that Social Security recipients will see a 3.3 percent increase in their 2007 benefit checks, or about $33 a month for the average retired worker. That cost-of-living increase, derived from the consumer price index, is smaller than the 4.1 percent increase for 2006.

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