US Inflation Accelerates as Gas Prices Surge
US inflation accelerated last month as gas prices spiked in the wake of renewed fighting in the Middle East, putting pressure on Americans' finances. The consumer price index rose 3.4% last month compared to a year ago, matching July's rate but increasing from 0.1% in August. Core prices, excluding food and energy, were 2.4% higher than a year ago, down slightly from July's 2.5% but with the largest monthly increase since April.
The sharp jump in gas prices is concerning economists, who worry that it could spill into other parts of the economy. Diesel prices have hit record highs above $6 a gallon, increasing shipping costs for groceries and other goods. Airline tickets rose 2.7% on a monthly basis, with a 23% increase from last year.
Federal Reserve officials are now more likely to raise interest rates next week, which could lead to higher mortgage and auto loan costs in the months ahead. Chair Kevin Warsh has signaled that he would need to see continuing disinflation to leave rates where they are, but Friday's report does not deliver that. Economists like Kathy Bostjancic warn that this is 'not one-time' and could be a prolonged disruption.