U.S. Consumer Prices Rise 0.5% In September, Slightly Less Than Expected
October 13 2017 - 5:18AM
RTTF2
Consumer prices in the U.S. increased by slightly less than
expected in the month of September, according to a report released
by the Labor Department on Friday.
The Labor Department said its consumer price index climbed by
0.5 percent in September after rising by 0.4 percent in August.
Economists had expected prices to increase by 0.6 percent.
The increase in consumer prices was largely due to a jump in
energy prices, which soared by 6.1 percent in September after
jumping by 2.8 percent in August.
Gasoline prices spiked by 13.1 percent due to Hurricane Harvey
and accounted for about three-fourths of the increase by the
headline consumer price index.
Excluding food and energy prices, core consumer prices inched up
by 0.1 percent in September after edging up by 0.2 percent in
August. Core prices had been expected to rise by another 0.2
percent.
The uptick by the core index reflected higher prices for
shelter, motor vehicle insurance, recreation, education, and
wireless telephone services.
On the other hand, the Labor Department said prices for new
vehicles, household furnishings and operations, medical care, and
used cars and trucks fell during the month.
The report said the annual rate of growth in consumer prices
accelerated to 2.2 percent in September from 1.9 percent in August,
while the annual growth in core consumer prices held at 1.7
percent.
"Overall, with temporary factors weighing on core inflation and
the activity data still suggesting that economic growth is strong,
we still think that the Fed will press ahead and raise rates in
December," said Michael Pearce, U.S. economist at Capital
Economics.
He added, "Once those factors fade in early 2018, and against
the backdrop of exceptionally tight labor market, we suspect that
core inflation will rebound in 2018."
On Thursday, the Labor Department released a separate report
showing producer prices increased in line with economist estimates
in the month of September.
The Labor Department said its producer price index for final
demand climbed by 0.4 percent in September after edging up by 0.2
percent in August.
Excluding food and energy prices, core producer prices still
rose by 0.4 percent in September after inching up by 0.1 percent in
August. Core prices had been expected to rise by 0.2 percent.
The report also said the annual rate of producer price growth
accelerated to 2.6 percent in September from 2.4 percent in
August.
The year-over-year growth in core consumer prices also
accelerated to 2.2 percent in September from 2.0 percent in the
previous month.
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