Consumer prices accelerated in September, bolstering the case for the Federal Reserve to raise interest rates in December after pausing this week. The Personal Consumption Expenditures index rose 0.5 percent month-over-month and 3.6 percent annually, according to the Bureau of Economic Analysis. Core inflation, excluding food and energy, jumped 3.1 percent yearly and increased 0.3 percent from the prior month.
The data confirms inflation remains hotter than the Fed's 2 percent target. Two Fed officials dissented, voting to raise rates, including Governor Lisa D. Cook.
Investors expect another increase in December and possibly several times next year. A severe energy crunch tied to the war with Iran has been a major price driver, with oil soaring through the Strait of Hormuz. Fed Chairman Kevin M.
Warsh acknowledged inflation remains elevated despite a strong economy. The meeting highlighted the board's flexibility to gather more data before the next hike. Personal income grew just 0.2 percent last month, less than August's 0.3 percent increase.
Source: New York Times Top Stories · Summarized by HeadlinesBriefing