Consumer inflation up 0.2 percent in September

WASHINGTON (AP) _ Consumer prices rose a moderate 0.2 percent in September despite the biggest jump in energy costs in five months. <br><br>The rise in the Consumer Price Index, the government's most

Friday, October 18th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Consumer prices rose a moderate 0.2 percent in September despite the biggest jump in energy costs in five months.

The rise in the Consumer Price Index, the government's most closely watched inflation gauge, was in line with economists' expectations and followed a 0.3 percent increase in August and a 0.1 percent gain in July.

The government report released Friday showed that energy costs shot up by 0.7 percent in July, led by a 1 percent surge in gasoline pump prices. Energy costs have accelerated in the past three months, reflecting in part growing concerns that a possible U.S. war in Iraq will disrupt global oil supplies.

With the release of the September CPI, the government was able to announce that millions of Americans recieving Social Security benefits will see their checks increase by 1.4 percent next year which will mean an additional $13 a month in benefits for the average retiree, pushing his monthly check to $895.

The Social Security adjustment, based on measuring the increase in consumer prices from the third quarter of last year to the third quarter of this year, is the smallest since a 1.3 percent rise in 1999 and reflects the depressing effects the weak economy is having on prices.

Most analysts believe that the jump in energy costs will not be enough to cause a large acceleration in the overall inflation rate as prices elsewhere will continue to be held back by the inability of businesses to hike the costs of their products.

In another report, the Commerce Department said the U.S. trade deficit swelled to a record $38.5 billion in August, reflecting Americans' heavy appetite for foreign-made clothes, cars and TVs.

The trade deficit was a sizable 9.7 percent higher than the $35.1 billion trade gap reported for July, the report said.