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US consumer prices rose 0.1% in September



WASHINGTON-U.S. Consumer prices rose only slightly in September, with signs of inflationary pressures still in sight as a strong dollar keeps import prices low and energy costs fall.

The consumer price index, which measures what Americans pay for everything from hairspray to hotel rooms, rose 0.1% in September, after rising by a seasonally adjusted 0.2% in August, the ministry of labor said Thursday.

In a positive sign for American workers, moderate price increases meant that inflation-adjusted gains rose the most in six months.

Economists polled by the Wall Street Journal expected consumer prices to pick up by 0.2% in September and core prices also rose 0.2%. Excluding volatile food and energy categories, so-called core consumer prices rose by 0.1

%, as in August.

In the twelve months to September, total prices increased by 2.3%, the smallest change on the previous year since February. Core prices rose 2.2% yoy, as in August.

Economists forecast a 2.4% increase in overall prices over the previous year and a 2.3% rise in core prices over the 12-month period. 19659005] A stronger dollar is likely to limit prices for goods that are either bought abroad or compete with imports. Rising interest rates and faster economic growth in the US compared to other developed economies have helped push the dollar in recent months. The WSJ Dollar Index, which measures the greenback against a basket of other currencies, rose about 5% from June to September.

Meanwhile, wages rose in September as workers benefited from a tense job market coupled with subdued inflation. Seasonally adjusted average hourly wages increased by 0.3% in September and by 0.5% compared to September 2017.

Thursday's report showed that the energy price index fell by 0.5% in September and the seasonally adjusted oil price dropped by 0, 2 fell% after a 3% increase in August. The price index for used cars and trucks also dropped significantly by 3% in the month under review. Food prices were flat.

The estimate follows about two weeks after Federal Reserve policymakers raised their short-term benchmark interest rate to between 2% and 2.25%. Officials indicated that they will raise the rate later this year and by 2019 to keep a strong economy at a stable level.

The risk of inflation rising higher and faster than expected could cause the Fed to raise interest rates a little faster, Fed chairman Jerome Powell said at his September 26 news conference. He added, "We do not see that, we really do not see that."

"Inflation is low and stable," he said.

Thursday's report follows the Ministry of Employment's latest employment report, which showed that the average hourly wages of private sector workers rose 2.8% yoy in September, a slight decline of 2.9% in August above inflation of 2.3% yoy.

On Wednesday, an indicator of US business prices following a summer slowdown showed signs of recovery in September.

The Producer Price Index, a measure of the prices companies receive for their goods and services, rose in September seasonally adjusted by 0.2% month-on-month, according to the Ministry of Labor. The rise in prices in September came after two months of sluggishness and was driven by a sharp increase in transport prices.

Write to Harriet Torry at harriet.torry@wsj.com and Eric Morath at eric.morath@wsj.com


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