Consumer prices increased in September at the fastest pace since the spring as gasoline costs jumped after declining for two straight months, the Labor Department said Tuesday.
The consumer price index, a closely watched barometer of inflation, rose 0.3% last month after a 0.2% gain in August. The last time the measure increased by more was in April.
Prices increased 1.5% for the 12 months that ended Sept. 30, the fastest inflation rate in nearly two years.
A year ago, the annual rate was just below zero.
Tuesday’s report likely boosts the chances that Federal Reserve policymakers will nudge up their benchmark short-term interest rate again before the end of the year. Fed officials have been waiting for inflation to pick up after years of slow price growth following the Great Recession.
Gasoline prices increased 5.8% in September and accounted for more than half of the overall rise in the consumer price index, the Labor Department said. Gas prices had declined 0.9% in August and 4.7% in July.
Rent and housing costs also contributed to the consumer price index increase last month, rising 0.4% for its biggest gain since May.
The higher prices in those key sectors came as food costs in September were unchanged for the third consecutive month.
Core prices, which exclude often-volatile food and energy costs, increased 0.1% last month. The pace was slower than the 0.3% growth in August because it does not factor in the declining gas prices.
For the 12 months that ended Sept. 30, core prices increased 2.2%, down from a 2.3% annual rate through the end of August.
Fed monetary policymakers want to see prices rising 2% annually. The Fed uses a different inflation barometer based on personal consumption expenditures that runs lower than the consumer price index.
Through the end of August, that measure showed prices had increased 1% and core prices were up 1.7%.
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