US inflation grows
US inflation rose in September at the fastest pace in five months, reflecting increases in the prices of fuel and housing.
The consumer price index rose 0.3 percent for the month on a seasonally adjusted basis, matching analyst expectations.
Over the prior 12 months, the index was up 1.5pc, the largest yearly gain since October 2014.
A 5.8pc rise in gasoline prices accounted for more than half of the monthly increase. Housing rose 0.4pc, the largest increase since May. Prices for new and used cars, communications and apparel were down. The costs of medical care and auto insurance moved higher.
Excluding food and fuel, where prices are more volatile, the index for September rose only 0.1pc but was up 2.2pc over 12 months.
US policymakers have waited for signs of stronger inflation this year before raising interest rates, but the Fed has so far left them unchanged since December at 0.25 to 0.5pc.
Ian Shepherdson, chief economist at Pantheon, said the annual inflation figure was “rocketing”.
“We expect to see a 2.5pc rate by next February, by which point we think surveys of inflation expectations will have risen significantly,” he wrote in a client note.
However, Steven Ricchiuto, chief economist at Mizuho Securities USA, said that a relatively small monthly increase in the core index, excluding food and fuel, “suggests that there are still powerful deflation forces present in the goods area”.