US inflation rises to 3.7% as gasoline jumps

US consumer inflation rose to 3.7 percent in September as gasoline costs jumped, the Department of Labor said Wednesday, adding to cost-of-living pressure before the November 3 midterm elections.

The consumer price index increased from 3.4 percent in August and came in above the 3.6 percent forecast by analysts cited by MarketWatch. Consumer prices rose 0.6 percent from August to September, compared with a 0.4 percent monthly increase the previous month.

Gasoline costs rose 9.1 percent on the month and accounted for more than half of the increase, the Labor Department said. Excluding volatile food and energy prices, core CPI rose 2.6 percent from a year earlier.

Average US gasoline pump prices have risen more than 45 percent since the Middle East war to $4.33 per gallon, according to AAA motor club data. Diesel prices have risen 67.7 percent, increasing transport costs and raising the risk of further pressure on consumer prices.

Energy prices have risen since the United States and Israel attacked Iran in late February and Tehran blocked the Strait of Hormuz, a key route for oil and gas shipments.

“Again, the Iran-US conflict has led to higher motor fuel costs that everyone is experiencing,” ING economist James Knightley told AFP. He said higher airline fares were also likely to add price pressure.

US government bond yields rose after the inflation report. The yield on the 10-year Treasury note stood at 5.32 percent, up from 5.21 percent on Tuesday.

Knightley said he did not expect the Federal Reserve to raise interest rates at its October 27-28 meeting, saying several policymakers had signalled a preference for a slower approach. Industries sensitive to interest rates, including housing, are already under pressure from higher borrowing costs.