Make us your home page
Instagram

Inflation eases except for food and gas prices

WASHINGTON — Consumers paid more for food and gas last month, although inflation outside those volatile categories was tame.

The Labor Department said the Consumer Price Index rose 0.3 percent in September, below August's 0.4 percent rise. Excluding food and energy, so-called core prices increased 0.1 percent, the smallest rise since March.

Inflation has worsened this year, after the cost of oil, grains and other commodities spiked in the spring. But economists expect price increases to moderate in the coming months as weak growth lowers commodity prices.

A small amount of inflation is good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.

Still, Americans are facing higher food and gas prices at a difficult time. The unemployment rate has been roughly 9 percent for more than two years. Hiring is slow, and few people are seeing much in the way of raises. Steeper prices for basic necessities have forced many to cut back on more discretionary purchases. That has slowed overall growth.

Food prices rose 0.4 percent in September, pushed up by big increases in the dairy, cereals, and fruits and vegetables categories. Gas prices rose 2.9 percent.

Dairy prices have jumped 10.2 percent in the past year. Gas prices have soared 33.3 percent.

Those increases are key reasons that overall inflation has jumped 3.9 percent in the 12 months ending in September, the largest year-over-year increase in three years. Core prices have increased 2 percent for the same period.

At the same time, inflation-adjusted average hourly earnings fell 0.1 percent in September, the Labor Department said Wednesday. In the past year, average inflation-adjusted hourly earnings have dropped 1.9 percent.

The core index has reached the top of the Federal Reserve's informal inflation target of between 1.5 percent and 2 percent. But Fed policymakers also expect inflation to moderate in the coming months. Last month, Fed officials said that inflation would decline to levels "at or below" the target, according to minutes released last week.

On a brighter note, prices for other goods have fallen or flattened. Clothing prices plummeted 1.1 percent last month, their steepest drop in 13 years. That comes after four months of sharp increases. Used car prices fell, while new car prices were unchanged for the third straight month.

Fed report shows rise in activity

Most areas of the country reported slight economic improvement in September and early October, according to a Federal Reserve survey of its 12 bank regions, known as the Beige Book. But several regions said a hazier economic outlook is making businesses more cautious and holding back their spending. The Fed said Wednesday that consumer spending rose slightly in most districts, as did manufacturing, particularly in the auto industry, which has been hampered since the March 11 earthquake in Japan. The Atlanta region, which includes all of Florida, reported job growth in manufacturing, transportation and energy, while workers with specialized skills in such fields as information technology were seeing wage gains.

Inflation eases except for food and gas prices 10/19/11 [Last modified: Wednesday, October 19, 2011 8:36pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  2. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  3. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  4. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  5. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]