Consumer Prices Expected to Show Rise

Investors are bracing for another dose of unsettling inflation news when the Labor Department reports Tuesday on September consumer prices. The consumer price index probably rose 0.3% in September following a 0.3% gain a month earlier, analysts predict. The CPI core rate, which omits food and energy, probably rose as well, climbing 0.3% in September after rising 0.1% in August. The CPI will follow Friday’s report that the producer price index posted the largest increase since September 1990, rising 1.1% in September. Oil and tobacco led the increase. Auto prices also increased. “The CPI--it’s going to be another bad number,” said David Wyss, an economist at Standard & Poor’s DRI in Lexington, Mass. “Higher oil and tobacco prices are passed on to the consumer very quickly.”

Other economic reports due this week:

* The Commerce Department is expected to report Tuesday that starts of new housing construction declined in September amid rising mortgage rates. Starts probably fell 2.7% for the month to a seasonally adjusted annual rate of 1.63 million after rising a month earlier on strength in apartment and condominium projects.

* The Commerce Department on Wednesday is likely to report that the international trade deficit in goods and services narrowed to $25 billion in August from a record $25.2 billion in July, analysts said. Still, the deficit is on target to set an annual record.