U.S. consumer prices recorded their biggest gain in five months, as the cost of gasoline and rents surged this September. There was a 5.8% jump in gasoline prices last month which accounted for more than half of the increase in the consumer price index (CPI). Along with this, Americans paid more for electricity, with prices having their biggest gain since December 2014. Rent recorded its biggest increase in nearly 10 years. These price increases in gasoline and rent point to a steady pickup of inflation. The CPI increased 0.3 percent last month. This in turn will help keep the Federal Reserve on track to raise interest rates this coming December. The central bank has a 2 percent inflation target, and the tracked inflation right now is at 1.7 percent.
Increasing prices are bad news for retirees because social security recipients are only to get a 0.3 percent cost of living adjustment increase next year. Good news for households was that food prices did not have any effect on the CPI. Food prices have been unchanged for the third straight month, but the cost of food consumed at home declined for the fight straight month. Consumers also paid more for grooming, motor vehicle insurance, tobacco, and airline fares. Communication prices recorded their largest decline in two years. Motor vehicle prices decreased and and apparel prices went down 0.7 percent.