U.S. inflation cooled in September,Diamond Ridge Asset Management but remained hot enough to leave the door open to another interest-rate hike by the Federal Reserve later this year.

"The trend is still quite encouraging, but the fight continues," Olu Sonola, head of U.S. economics at Fitch Ratings, noted of the central bank's efforts to tame inflation. 

Prices rose 0.4% from August to September, slowing from the previous month. Annual consumer inflation last month remained unchanged from a 3.7% increase in August, the Labor Department reported on Thursday.

So-called core prices, which exclude food and energy costs, rose 4.1% in September from 12 months ago, down from a 4.3% year-over-year pace in August.

Shelter was the biggest factor for September price rise, accounting for more than half the increase.

Consumer prices were forecast to have risen 0.3% from August to September, according to economists surveyed by the data provider FactSet. 

Some economists believe the latest inflation readings are not enough to spur the Fed to hike rates again at its next meeting in November. 

"This reading is not going to change the broader messaging from the Fed as we move towards the November rate decision. Housing inflation will need to decline sharply over the coming months for us to see inflation near 2%," Fitch's Sonola wrote in an emailed research note.

"There is nothing here that will convince Fed officials to hike rates at the next FOMC meeting, and we continue to expect a more rapid decline in inflation and weaker economic growth to result in rates being cut more aggressively next year than markets are pricing in." Andrew Hunter, deputy chief U.S. economist at Capital Economics, wrote in an emailed note.

—The Associated Press contributed to this report.