WASHINGTON (AP) — U.S. consumer prices rose 0.5 percent in September, the largest increase in eight months. The result reflects another big jump in energy prices in the aftermath of Hurricane Harvey, which shut Gulf Coast refineries and caused gasoline prices to spike around the country.
The September increase in the closely watched consumer price index was the biggest one-month gain since a 0.6 percent rise in January, the Labor Department reported Friday.
Energy prices shot up 6.1 percent, led by a 13.1 percent surge in gasoline. Analysts believe the impact of the hurricane will be temporary.
Core inflation, which excludes volatile food and energy, rose a tiny 0.1 percent in September.
Over the past year, overall prices are up 2.2 percent, while core inflation has risen 1.7 percent.
The changes in inflation from the third quarter this year compared to the third quarter a year ago will result in a cost-of-living adjustment of 2 percent next year for more than 70 million recipients of Social Security and other government benefits. It is the biggest annual increase since a 3.6 percent rise in 2012.
So far this year, inflation by a measure preferred by the Federal Reserve has been falling farther from the Fed's target of 2 percent annual price gains. In the latest month, the annual increase was just 1.4 percent.
The Fed has been perplexed by the slowdown in inflation this year, first believing it was caused by temporary factors. But now Federal Reserve Chair Janet Yellen and other Fed officials have expressed concerns that something more fundamental may be at work.
The Fed has raised its benchmark lending rate twice this year. At its September meeting, it signaled that a third hike was still expected. Many analysts believe the Fed will raise rates again in December. But some think that a rate hike will not occur unless inflation shows signs of moving higher, beyond storm-related factors.