WASHINGTON: Soaring fuel prices drove US inflation to an eight-month high in September, with the cost of gasoline hitting an eight-year record, the Labor Department reported Thursday. The spike in gasoline costs was likely tied to Hurricane Harvey, which idled much of US energy production in late August and created shortages, officials said. Otherwise, US price pressures otherwise remained tame, suggesting the energy-related jump could be transitory.
Monetary policymakers at the Federal Reserve remain divided over the dangers of inflation, with some Fed members pointing to persistently weak trends in inflation. However, market participants widely expect the central bank to raise interest rates in December. The Consumer Price Index, which tracks costs for household goods and services, rose 0.5 percent in September, seasonally adjusted, the largest increase since January. Analysts had been expecting an increase of 0.6 percent. On a 12-month basis, the index rose by 2.2 percent, surpassing the Fed’s two percent target. Nearly all the increase was due to the rise in the energy index, which jumped 6.1 percent. Gasoline prices soared 13.1 percent, their largest increase since June of 2009. Excluding the volatile food and fuel categories, the “core” price index rose only by a token 0.1 percent for the month. Year over year, September recorded a 1.7 percent gain in the core index, the same level now recorded for this measure for five straight months. Elsewhere in the September report, clothing for infants and toddlers rose seven percent, the largest one-month gain in more than 27 years. The price of soups also rose 3.5 percent over August, their largest one-month gain since January of 2008.
