US consumer prices rose 0.6% in September, lifting the annual rate to 3.7%, with gasoline accounting for about half of the monthly gain. Core CPI also came in above estimates, and the figures keep another Federal Reserve rate increase in play.
US consumer prices rose 0.6% in September, putting the 12-month rate at 3.7%, the Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones expected gains of 0.6% and 3.6%.
Energy costs drove the result. The energy index jumped 5.2% as tensions continued between the US and Iran, and gasoline prices soared 9.1%, accounting for about half the gain in headline CPI, according to the BLS.
Core CPI runs above estimates
Stripping out food and energy, core CPI rose 0.3% for the month and 2.6% on an annual basis. Estimates were 0.2% and 2.5%. According to Reuters, the annual core reading followed a 2.4% rise in August.
Elsewhere in the report, food prices were flat on the month and up 2.5% from a year ago. Shelter prices increased 0.4%, while used car and truck prices jumped 0.7%.
Fed hike odds in focus
The Fed last month raised its benchmark rate by 25 basis points to the 3.75%-4.00% range, its first hike in three years. Before the CPI report, CME Group's FedWatch Tool assigned a roughly 22% chance of a rate hike at the October 27-28 meeting, according to Reuters.
Markets expect the Fed to skip an October increase but to hike again in December, CNBC reported. Fed officials fear that the longer the war drags on, the higher the likelihood the energy spike makes its way through the broader economy and becomes embedded in consumer and business expectations.
A Reuters/Ipsos poll showed about 78% of Americans blamed Trump's policies for rising prices, which are outpacing wages.
Sources: CNBC, Investing.com (Reuters)
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