ICS Magazine

Consumer Prices Up Modestly; Housing Dips

October 19, 2004
WASHINGTON (AP)- Consumer prices rose by a modest 0.2 percent in September as a decline in prices for new cars and airline fares helped to temper a rise in costs for medical care, gasoline and fuel oil.

The rise in the Consumer Prices Index, the government's most closely watched inflation barometer, came after prices edged up by 0.1 percent in August, the Labor Department reported Tuesday.

Excluding energy and food prices, which can swing widely from month to month, "core" prices rose by 0.3 percent in September, up from a 0.1 percent gain in August and the largest increase April. A sharp increase in lodging prices was a main factor in the rise in core prices last month.

The overall CPI figure showing a 0.2 percent increase in September matched economists' expectations. The 0.3 percent rise in core prices, however, was slightly bigger than the 0.2 percent increase some economists were forecasting.

Meanwhile, the government also reported that people on Social Security will get a 2.7 percent increase - an extra $25, on average - in their monthly checks next year starting next January. The cost-of-living adjustment was announced by the Social Security Administration.

The latest increase was the largest since benefits rose by 3.5 percent in 2001. A 2.1 percent increase went into effect at the beginning of this year.

In another report, housing construction fell by 6 percent in September to a seasonally adjusted annual rate of 1.898 million units, the Commerce Department said. The decline - steeper than analysts were expecting - followed a 1.8 percent rise in housing activity in August, which turned out to be stronger than initially estimated.