PIcture: ISTOCK
PIcture: ISTOCK

Washington — A record spike in fuel prices following the summer’s back-to-back hurricanes drove up a closely watched US inflation measure in September, but the underlying trend remained weak, government figures showed on Monday.

The new figures come as the US Federal Reserve prepares to begin a two-day meeting on Tuesday, with policy makers widely expected to leave benchmark interest rates untouched, but to raise them in December.

However, disagreements among policy makers were unlikely to subside in the face of a fresh batch of weak numbers in September. The Personal Consumption Expenditures price index rose 0.4% for the month, up 0.2% from August and in line with analyst expectations.

The increase was driven almost entirely by a 6.8% spike in the costs of petrol, electricity and natural gas — the largest monthly jump in the energy index in more than eight years. But when volatile food and fuel costs are excluded, the "core" index rose only 0.1% for the month, the same level now recorded for five months in a row.

On a 12-month basis, the index grew 1.6%, up 0.2% from August, but the core index held steady at 1.3%, the same as in August.

The core annual measure has held below the Fed’s 2% target without interruption for more than five years.

Persistently low inflation has bedeviled policy makers during much of 2017, with Fed chairperson Janet Yellen describing the low price pressures variously as a "mystery," a "surprise" and a "concern." Most members of the Federal open market committee, which sets US monetary policy, appear to favour raising rates in the belief that inflation will soon spring to life.

Officials said hurricanes Harvey and Irma affected consumer spending, but they were unable to isolate the storms’ effects given how the underlying data were collected.

AFP

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