By CHRISTOPHER S. RUGABERAP

WASHINGTON -- Consumers paid more for food and gas last month, although inflation outside those volatile categories was tame.

The Labor Department says the Consumer Price Index rose 0.3% in September, below a 0.4% rise in August. Excluding food and energy, so-called core prices increased 0.1%, the smallest rise since March.

Inflation has worsened this year, after the cost of oil, grains and other commodities spiked in the spring. But economists expect price increases to moderate in the coming months as weak growth lowers commodity prices.

A small amount of inflation is good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.

Still, Americans are facing higher food and gas prices at a difficult time. Unemployment has been roughly 9% for more than two years. Hiring is slow and few people are seeing much in the way of raises. Steeper prices for basic necessities have forced many to cut back on more discretionary purchases. That has slowed overall growth.

Food prices rose 0.4% in September, pushed up by big increases in the dairy, cereals, and fruits and vegetables categories. Gas prices rose 2.9%.

Dairy prices have jumped 10.2% in the past year. Gas prices have soared 33.3%.

Those increases are key reasons overall inflation has jumped 3.9% in the 12 months ending in September, the largest year-over-year increase in three years. Core prices have increased 2% for the same period.

At the same time, inflation-adjusted average hourly earnings fell 0.1% in September, the Labor Department said Wednesday. In the past year, average inflation-adjusted hourly earnings have dropped 1.9%.

The annual increase in consumer prices means that 55 million Social Security beneficiaries will receive higher benefits next year. They will get a 3.6% cost-of-living increase, the first since 2009. Inflation has been so low in the past two years that Social Security checks, which are tied to the CPI, haven't changed.

The core index has reached the top of the Federal Reserve's informal inflation target of between 1.5% and 2%. But Fed policymakers also expect inflation to moderate in the coming months. Last month, Fed officials said that inflation would decline to levels "at or below" the target, according to minutes released last week.

On a brighter note, prices for other goods have fallen or flattened. Clothing prices plummeted 1.1% last month, their steepest drop in 13 years. That comes after four months of sharp increases. Used car prices fell, while new car prices were unchanged for the third straight month.

Rental costs, which have been pushing up the core price index in recent months, rose but at a slower pace than previous months.

A surge in gas prices drove wholesale costs up 0.8% in September, the government said Tuesday. Economists cautioned that the increase largely reflected one-time factors and broader inflation is likely to be modest.

Core wholesale prices rose only 0.2%.

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48 Comments

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scottee

things don't cost more.
our dollar is worth less.
ask congress and The Fed why.

October 20 2011 at 12:02 PM Report abuse rate up rate down Reply
bobvanlan

A very weird thing happened last week when I took a navel orange out of the fridge. I live in SW Florida and my daughter doess my grocery shopping for me. I love Sunkist navel oranges and that is what I thought I had grabbed. When peeling it I read the sticker expecting to see the familiar Sunkist label, instead It was a label from South Africa. How stupid is it to ship oranges to Florida from Africa. The MIlitary does the same thing. When I was in the Air Force I noticed that when I was in Maine the mess hall had potatoes from Idaho and when in Alaska the potatoes were from Maine. Ain't politics great?

October 19 2011 at 8:35 PM Report abuse rate up rate down Reply
1 reply to bobvanlan's comment
Rich Aemry

How are you surprised when an ORANGE is from the southern hemisphere in OCTOBER? That's not politics -- the earth is just tilted 23.4 degrees off ceter.

October 20 2011 at 3:02 AM Report abuse rate up rate down Reply
mscellanus

I wonder if they also exported many of these foods to other countries and thus caused a shortage here and now they are raising the prices on all of us? WAY TO GO !

October 19 2011 at 8:27 PM Report abuse rate up rate down Reply
mscellanus

I did some food shopping a few days ago and couldn't believe how the prices jumped in just a few weeks. I know the Holiday Season is upon us but really? Beef, Poultry and Port meats had gone up about $2 per pound. Just about many everyday foods went up over a dollar. It's Terrible!

October 19 2011 at 8:23 PM Report abuse rate up rate down Reply
fkflintstone

Anybody remember stagflation or the misery index,this is all to familiar to people who remember the late seventies.Jimmy Carter has returned

October 19 2011 at 7:37 PM Report abuse +1 rate up rate down Reply
1 reply to fkflintstone's comment
Rich Aemry

Stagflation began in 1971 before Carter even took office. Nixon was in his first term in 1971. Please, at least get your history straight.

October 19 2011 at 7:52 PM Report abuse rate up rate down Reply
hman570

More Lip Service from the Government, where do these people shop?? Oh that's right they don't have too as we foot their bill for them? Our Government has no clue of what is happening in our Great Country!!

October 19 2011 at 7:31 PM Report abuse rate up rate down Reply
cgtomahawk

Over night, change throught the whole store. Seems that the increases this time coincided with welfare check time.

Went to the grocery store last day of Sept. for a few things. Went back the next day, 1st Oct & all the shelf price stickers in the store were brand new, increased 15 -20% & a number had increased a min of 30% to 40%. I had forgotten to get a can of soup, which had been $1.50 & was changed to $.1.99. A loaf of French Bread had been $.98 & raised to $1.18. Wanted to get a pound of bacon but there was no pound packages. All the bacon was 12oz packages but was still the same price as the pound used to be. A 25% decrease in weight but still the same price as a pound used to be. A can of flavored coffee had been $4.49 & was increased to $5.89. Meats seem to be getting cut much thinner or smaller but cost more per pound. Pork chops are so thin that when cooked, it is like eating a piece of cardboard.
There is NO END in the screwing the people.


.

October 19 2011 at 7:29 PM Report abuse rate up rate down Reply
1 reply to cgtomahawk's comment
Rich Aemry

If the grocier is raising prices to target welfare recipients --that's a crime. You're getting screwed by criminal activity, not the government.

There is no basis to raise prices on items already in the store to account for fuel either. Price gouging is criminal activity, blame the criminals, and shop elsewhere.

October 20 2011 at 3:52 PM Report abuse rate up rate down Reply
puentemail

I do my grocery shopping on Wenesday, and I'll buy nothing but items on sale. Wenesday, is when most geocery stores star they weekly especials, and thats when they have many other items at a very LOW price so yuo will think they're allways that cheap. thats how you can save BIG buck's

October 19 2011 at 7:08 PM Report abuse rate up rate down Reply
1 reply to puentemail's comment
Rich Aemry

No argument about the Wednesday tip, it's good advice. You can also clip coupons and/or use a price tracking service. There are always ways to beat retail prices.

October 19 2011 at 7:22 PM Report abuse rate up rate down Reply
Hi Millionaires

If the government says that inflation is 3.2 % you can be guaranteed it is really double this at least. Unemployment is 9%, however, this does not incude businesses that went out of business, thoe no longer on unemployment and looking or not looking for jobs and contractors with nothing to contract. Here in Michigan my gues is it is over 20 % and I've seen this figure in the papers.

Social Security is our money. Congress received a raise in the beginning of 2010 and an inflationary increase at the end of 2010 and 2009. When I wrote to Senator Stabanow she justified the influationary increase in 2010 to influation and the high cost of food etc. But, it did not rise for those on social security, it did for Congress!!!!!!!!

I hope that the numbers are not manipulated before January so they claim that there has been no inflation like they have all along.

Please regardless of your venue, vote in 2012 and write your senators and representatives with your concerns. Congress has taken a back seat and allowed our president to run his own show. He now has gone into Africa without a vote from Congress. Pretty soon, Congress will not be needed at all. Afterall, our president and Al Sharpetin said forget Congress, the president should just make his own decisions.

October 19 2011 at 6:57 PM Report abuse rate up rate down Reply
1 reply to Hi Millionaires's comment
Rich Aemry

I agree. Write you congressional members!

But, do you think this is the first president to use unilateral mandates against the will of congress? Most presidents do that, and the last one was no exception to that rule either. Thing is people complained less vocally about it where I live because the president was on "their side." People are quick to notice the flaws in their enemies, but hate to look internally for the same flaws.

Cheny had the forget congress attitude too, he liked to enact secret laws we didn't know about and only inform 12 members of congress. Not that it justifies any misbehaivior from the current administration, but Perry and Romney have done the same things as heads of their respective states.

It's also a bad idea to use Al Sharptin as the example; Obama isn't out of the same school of thought. You really discredit your argument with those who don't already agree with you by bringing in Sharpetin, and when you use a poster boy used to justify veild racism, you discredit yourself further. You make a valid point, why ruin it with the unnecessary underhanded jab?

At the end of the day, no politician should make you choices for you. In an ideal world we have freedom until our freedom hampers the freedom of another. Still, if we refuse to make those decisions for ourselves --others make them for us. Are you willing to be part of the solution? It will be hard, but if we all aren't willing we won't have one.

October 19 2011 at 7:39 PM Report abuse rate up rate down Reply
1 reply to Rich Aemry's comment
johnskii

Right now we don't have any good Democrat or Republican presidential choices. God help us all.........

October 20 2011 at 7:33 AM Report abuse rate up rate down
lukedude27

Excluding Food and Energy. That is 2 of the things we rely on most! Food prices have been getting nuts as well as fuel. This is money directly out of our pockets. I own a landscaping business we buy over 100 gallons of fuel a week. Fuel is up over a $1 compared to last year. thats $100 a week. While that is passed on in higher prices to my customers it has a huge effect on our economy. Because in the end it all trickles down.

October 19 2011 at 6:45 PM Report abuse rate up rate down Reply
2 replies to lukedude27's comment
Rich Aemry

IIf you lower your prices back to where they were before all this when the cost of fuel goes down: I admire your honesty and integrity. You will be in a small number of honest shop owners, and you should take pride in that.

October 19 2011 at 7:43 PM Report abuse rate up rate down Reply
jambrozio

How will it be for you if the 999 thing were to get an extra 9 % Federal sales tax added on?Not only on fuel, but also on your equipment and prices for your clients. Fuel prices already are made up of about 50% taxes. Heck the Gov doesn't need to raise taxes. They just manipulate the gas prices and that increases their revenue. Check into it sometime. Call a bulk fuel supplier. Tell them you need 3000-5000 gallons. Ask what the gallon price is and what the out the door price is after taxes.

October 19 2011 at 9:57 PM Report abuse rate up rate down Reply