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By Victoria Stilwell
By Victoria Stilwell
WASHINGTON – The cost of living in the U.S. rose as projected in September as fuel charges climbed, capping the smallest year-to-year gain in five months.
The consumer price index increased 0.2 percent, matching the median forecast of 86 economists surveyed by Bloomberg, after rising 0.1 percent the prior month, Labor Department data showed today in Washington. Stripping out volatile food and fuel, the so-called core measure climbed 0.1 percent for a second month, less than projected.
In the Northeast region Northeast region – which comprises the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont – consumer prices rose 1.2 percent in September.
With inflation running below the Federal Reserve’s goal, the central bank has more flexibility to maintain its $85 billion-a-month bond buying program. Companies such as McDonald’s Corp., that are trying to pass on higher commodity costs, risk spurning value-conscious customers.
“There really isn’t any inflation pressure in the U.S,” said Julia Coronado, chief economist for North America at BNP Paribas in New York and the top-ranked CPI forecaster over the past two years, according to data compiled by Bloomberg. “That means the Fed can focus more on the employment side of its mandate and is not constrained in any way by inflation developments.”
Another report showed companies added fewer workers than projected in October, indicating the job market lost momentum amid budget strife in Washington. Employment increased by 130,000, the smallest gain in six months, following a revised 145,000 advance in September that was weaker than initially estimated, according to the ADP Research Institute in Roseland, N.J. The median forecast of 39 economists surveyed by Bloomberg called for an advance of 150,000 jobs.
Stock-index futures held earlier gains after the reports as investors awaited the outcome of the Fed’s policy meeting. The contract on the Standard & Poor’s 500 index maturing in December rose 0.2 percent to 1,771 at 8:42 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from a decrease of 0.1 percent to a 0.3 percent advance.