US consumer prices rose in September on higher oil costs

WASHINGTON (AP) - Higher energy costs fueled U.S. consumer prices in September, but overall inflation remained in check as it has for the past several years.

The Labor Department said Tuesday that consumer prices increased 0.3 percent last month. Much of that rise stemmed from energy, housing and prescription drugs. Energy costs surged 2.9 percent in September as oil and gasoline prices rebounded from recent lows. Previous price declines still mean gas costs 6.4 percent less than a year ago.

Inflation has stayed relatively low despite job growth that has brought more workers into the economy. Until last month, the modest levels of inflation largely came from muted oil prices and a stronger dollar.

With inflation a minimal risk, the Federal Reserve has held down short-term interest rates in hopes of spurring more borrowing and spending to boost economic growth. The markets anticipate the Fed will keep rates steady at its November meeting and then hike rates at its upcoming meeting in December.