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Published: Friday, 10/15/2010

Consumer prices up aided by fuel, food


WASHINGTON - Consumer prices rose last month, driven up by higher costs for gasoline and food.

The U.S. Labor Department said Friday the Consumer Price Index rose by 0.1 percent in September, after a 0.3 percent rise in August.

Core consumer prices were unchanged for the second-straight month.

The sluggish economy is keeping a lid on prices. Consumers are holding back on spending, with unemployment high and wages stagnant.

Moderate price inflation also allows the Federal Reserve to keep the short-term interest rate it controls at a record low of nearly zero, where it has been since December, 2008.

A 1.6 percent increase in the price of gas drove energy costs higher by 0.7 percent. And the prices of meat, cereals, baked goods, and dairy products also rose, the department said.

Clothing prices fell by 0.6 percent in September, the second-straight drop. And weakness in the housing market sent housing prices down 0.1 percent, according to the government's index.

Meanwhile, a report Friday by the Commerce Department said retail sales climbed 0.6 percent in September, and August sales were revised up to a 0.7 percent growth rate from an initial reading of 0.4 percent.

Excluding motor vehicles, retail sales improved by 0.4 percent in September.

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