More expensive gas and rising housing costs boosted consumer inflation in September by the largest amount in five months, keeping the Federal Reserve on the cusp of raising U.S. interest rates.
The consumer price index climbed 0.3% last month, the government said Wednesday. That matched the forecast of economists polled by MarketWatch.
The cost of shelter — rent, new homes and previously owned homes — rose at the fastest pace since May. Energy prices, mainly gas, also posted the biggest increase since early spring. That largely accounted for higher consumer inflation in September.
Over the past year, consumer prices have advanced 1.5%, the largest 12-month gain since late 2014. Higher inflation is expected to spur the Federal Reserve to raise interest rates soon, most likely before the end of 2016.
Many economists believe inflation will creep higher over the next year with oil prices stabilizing and wages starting to rise faster, but it’s still expected to remain on the low side.
“For all the recent talk of letting [inflation] “run hot” the reality is we’re not quite even at lukewarm yet,” said Richard Moody, chief economist at Regions Financial.
Americans continue to see relief at the grocery store, however. The cost of food was unchanged for the third straight month and over the past year grocery prices have fallen 2.2%, the biggest decline since 2009 in the early stages of the current economic recovery.
Excluding food and energy, consumer prices…
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