A report on Tuesday shows that U.S. consumer prices recorded their biggest gain since September. The reason is partially is the increase in gasoline and rent prices, which points to rise in inflation rate. If proves to be consistent, a further increase in consumer prices is likely to increase the changes for rate hike by the Federal Reserve in December.
According to The Labor Department’s data, the Consumer Price Index increased 0.3 percent in the month of September, a higher than the 0.2 percent increase in August. In one year, the index has increased by 1.5 percent, the biggest year-on-year increase since October 2014.
About 60 percent of the CPI covers prices consumers pay for services from medical visits to airline fares, movie tickets and rents.
Chris Rupkey, chief economist at MUFG Union Bank in New York, said in a statement, "Today's inflation data are not hot enough to put a rate hike up on the table next month, but it is also true the economy is strong enough to generate some inflation pressures.”