Consumer prices accelerated in September, which could bolster the case for the Federal Reserve to raise interest rates in December after forgoing an increase this week.
Prices, as measured by the Personal Consumption Expenditures index, increased 0.5 percent in September from a month earlier and 3.6 percent compared with the same time last year, according to a report released on Thursday by the Bureau of Economic Analysis. The pick up in prices provided further confirmation that inflation is running hotter than Fed officials would like. Their target, as measured by P.C.E., is to keep the annual increase near 2 percent over time.
“Core” prices, which excludes more volatile categories like food and inflation, jumped 3.1 percent in September annually and rose 0.3 percent from a month earlier. That month-over-month increase was also 0.3 percent in August.
The numbers come a day after Fed officials voted 10-2 to keep interest rates steady, after raising them last month. Two Fed officials dissented and voted to raise rates on Wednesday, including Lisa D. Cook, a Fed governor. Investors expect officials are likely to raise rates again at their last meeting of the year, in December, and possibly several times next year.
A big factor pushing up prices this year has been a severe energy crunch created by the war with Iran. Choked-off energy flows through the Strait of Hormuz sent oil prices soaring, which have rippled across U.S. economy.
On Wednesday, Kevin M. Warsh, the Fed’s chairman, said the U.S. economy was strong but acknowledged that inflation remained elevated. The meeting underscored that the board felt it had more flexibility to gather more data on the state of the economy before raising borrowing costs again.
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