Federal Reserve’s preferred inflation gauge shows still-persistent underlying price pressures

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — An inflation gauge that’s closely monitored by the Federal Reserve showed price increases remained elevated in September amid brisk consumer spending and strong economic growth. Prices rose 0.4% from August to September, the same as the previous month. And compared with 12 months earlier, inflation was unchanged at 3.4%. September’s month-to-month price increase exceeds a pace consistent with the Fed’s 2% inflation target, and it compounds already higher costs for such necessities as rent, food and gas. The Fed is expected to keep its key short-term interest rate unchanged when it meets next week. But its policymakers have flagged the risk that stronger growth could keep inflation persistently high and require further rate hikes to quell it.