|
U.S. consumer prices jump
|
 |
October 19, 2001: 10:30 a.m. ET
CPI up 0.4%, boosted by higher gas prices; U.S. trade gap narrows.
|
NEW YORK (CNNmoney) - A spike in the cost of gasoline pushed U.S. consumer prices higher than analysts had expected in September, data from a government report showed Friday.
The Consumer Price Index, the government's main inflation gauge, rose 0.4 percent, the Labor Department report said. Analysts had forecast a 0.2 percent rise, up from a 0.1 percent increase in August.
The rise in the CPI was the biggest since May. The index showed a 2.6 percent increase in energy prices, led by an 8.6 percent rise in gasoline prices, the biggest jump in 15 months. Other energy costs showed a decrease in the period, with natural gas prices falling 5.5 percent, while electric prices declined 0.6 percent, according to the index.
Gas prices have retreated since the report was compiled, though, with gasoline at only $1 a gallon a some markets. About two-thirds of the data in the report were collected after the Sept. 11 attacks on the World Trade Center and the Pentagon.
The so-called "core CPI", which excludes often volatile energy and food sectors, rose 0.2 percent after a like gain in August. The increase matched economists' forecasts, according to Briefing.com.
|  | |
 |
|
|
| |
CNNfn's Kathleen Hays takes a closer look at consumer price index numbers.
| |
|
"Despite the discouraging headline that CPI inflation rose, there was actually more to be encouraged than discouraged about in this report," said David Orr, chief economist at Wachovia Securities. "Since it is already known that gasoline has dropped sharply in October, that September rise can also be ignored."
Given the overall picture of tame inflation, the more than 50 million people who receive Social Security will get a 2.6 percent cost-of-living increase in their monthly checks next year, the government said. That translates to an extra $22 a month for the average retiree. Last year, they got a 3.5 percent boost, a nine-year high.
Separately, a Commerce Department report showed the U.S. trade deficit fell to $27.1 billion in August from a revised $29.2 billion in July. Analysts had forecast the deficit would dip less, to $28.6 billion. That's the smallest monthly trade gap since January 2000.
The narrower gap came as imports fell and exports posted a small rise, yet another sign the slowing U.S. economy has cut demand for goods at home.
"The import data are consistent with an economy that is struggling to find its footing," said Jay Bryson, global economist with Wachovia.
On Wall Street, stocks fell as anthrax scares and amplified military action overshadowed potentially positive corporate news from Microsoft. Investors showed little reaction to the economic reports.
The CPI report is often closely watched for signs of what the Federal Reserve might do about interest rates, since adjusting rates is a key means for the central bank to combat inflation. But the Fed isn't focused on inflation right now as it continues to cut rates to try to hold off a recession in the wake of the terrorist attack, Orr said. 
Associated Press contributed to this report
|
|
|
|
|
|
|
