US core inflation rate remains muted

Washington, Oct 14 (IANS) A surge in energy prices in the aftermath of Hurricane Harvey pushed the US inflation rate in September to an eight-month high, while the core inflation less food and energy remained muted, according to a report released by Labor Department.

The latest inflation report, released on Friday, comes at a time when the Federal Reserve officials have been debating on the myth of low inflation and whether the US central bank should raise interest rates again in December, Xinhua news agency reported.

The Consumer Price Index (CPI) rose 0.5 per cent in September on a seasonally adjusted basis after advancing 0.4 per cent in August, according to the report. Over the last 12 months, the all items index rose 2.2 per cent.

Gasoline prices surged 13.1 per cent last month because of the supply chain interruption caused by Hurricane Harvey, accounting for 75 per cent of the rise in the CPI.

Excluding the volatile food and energy components, the core consumer prices gained 0.1 per cent in September. In the 12 months through September, the core CPI increased 1.7 per cent.

US core personal consumption expenditures (PCE) price index, a separate inflation gauge compiled by Commerce Department, increased 1.4 per cent in August from a year ago.

The core PCE index, which is preferred by the Fed, has consistently undershot the Fed's two percent target for more than five years.

"Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent," said the Minutes of the Fed's September 19-20 meeting published on Wednesday.

Investors expect that the central bank would likely raise interest rates again in December, while the persistent muted inflation rate could be a major obstacle.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)