US inflation rises to 3.7% in September as energy prices jump

US consumer prices rose 0.6 percent in September on a seasonally adjusted basis, the Bureau of Labor Statistics reported on October 14, after a 0.4 percent increase in August. Over the 12 months to September, the all-items Consumer Price Index rose 3.7 percent.

Energy accounted for much of the increase. The energy index climbed 5.2 percent during the month and 20.4 percent over the year. Gasoline prices rose 9.1 percent in September on a seasonally adjusted basis, or 6.5 percent before adjustment, and stood 34.2 percent above their level a year earlier. The rise comes as crude oil trades above 100 dollars a barrel amid attacks on shipping and energy infrastructure in the Gulf region.

Underlying inflation was steadier. The index for all items less food and energy rose 0.3 percent, the same pace as in August, and was up 2.6 percent from a year earlier. Shelter costs rose 0.4 percent on the month and 3.2 percent over the year.

The gap between headline and core inflation matters for the Federal Reserve, which raised its policy rate to a range of 3.75 to 4.00 percent in September and said inflation "remains elevated." Higher fuel costs feed directly into the headline index and can lift transport and goods prices over time, while core inflation is usually treated as a better guide to persistent price pressure. In markets, the report added to bets on further rate increases, Reuters reported.

Fed policymakers meet next on October 27 and 28. The BLS is scheduled to publish October consumer price data on November 10.