WASHINGTON -- Consumer prices surged in September by the largest amount in more than 25 years as Hurricanes Katrina and Rita sent energy prices soaring at the fastest pace on record.
The Labor Department reported Friday that inflation jumped 1.2 percent last month.
It said that 90 percent of that increase came from a record-setting 12 percent surge in energy prices which reflected gasoline prices that briefly topped $3 per gallon last month after widespread shutdowns of refineries and oil and natural gas platforms along the Gulf Coast.
The White House downplayed the report.
"The president has confidence in the Federal Reserve when it comes to monetary policy and their ability to address any inflation concerns," White House spokesman Scott McClellan said.
Meanwhile, the Federal Reserve reported that the devastating hurricanes sent output at the nation's factories, mines and utilities plunging by 1.3 percent in September, the biggest one-month drop in more than 23 years.
The decline in industrial output was led by a 9.1 percent drop in output in the mining sector, a category that includes oil and natural gas. Output at U.S. factories fell by 0.5 percent and utility output was down 0.9 percent.
The Labor Department said that inflation was more moderate outside of energy and food. The so-called core rate of inflation rose by just 0.1 percent, the sixth straight month of benign readings in this area.
However, economists and officials at the Federal Reserve are worried that the energy jolt from the Gulf Coast hurricanes could start causing more widespread inflation problems.
The sharp jump in consumer prices in September helped to push next year's cost of living adjustment for 48 million Social Security recipients to 4.1 percent, the biggest advance since 1991.
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