Consumer Prices Up 0.2% in September

U.S. consumer prices rose a mild 0.2% last month, but a sharp jump in lodging costs pushed core inflation up at its quickest pace in five months, a government report showed Tuesday.

Energy costs fell 0.4% in September, the third straight monthly decline that tempered the rise in the overall consumer price index, the Labor Department said.

But the core CPI, which excludes volatile food and energy costs, climbed 0.3%, the biggest gain since April.

Wall Street economists, who had expected both the overall and core measures to advance 0.2%, said the report did not herald a big inflationary outbreak, but they cautioned that the latest oil-price increase had yet to show up in the data.

“Next month will be dominated by surging energy prices, but the key point is that broad core inflation is very benign,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

The Labor Department said a 2.9% rise in lodging costs -- such as at hotels and college dorms -- accounted for most of the month’s core CPI acceleration.

In a separate report, the Commerce Department said groundbreakings for single-family homes fell 8.2%, the biggest drop since February 2003. But permits -- a sign of builder confidence -- rose 1.8%.