Consumer prices rise again

Consumers in Utah and across the nation will be fortunate if prices for fuel and heating oil remain at current, already-record levels this winter, a Wells Fargo economist said Friday.

But it appears the economy has weathered the summer's tumult — complete with hurricanes and geopolitical instability — better than some had expected.

Wells Fargo reported Friday that consumer prices along the Wasatch Front increased 0.8 percent in September, the eighth straight month of overall increases. The same day, the U.S. Labor Department reported that inflation nationwide rose 1.2 percent last month.

Locally and nationally, economists pointed to record-setting energy prices — up 12 percent nationally from the same period one year ago, according to the Labor Department — for the overall increase.

But Kelly K. Matthews, executive vice president and economist at Wells Fargo, said while energy prices are likely to remain high at least for the next four months, there is cause for cautious optimism.

The nation's core inflation rate, which excludes energy and food prices, increased 0.1 percent in September and in the four previous months. Which, according to Matthews, suggests that the increases in energy prices haven't yet bled over into other sectors — one of the factors leading to the energy-driven recession of the 1980s.

"We have to recognize that 0.1 percent on a core inflation basis is not very much in the kind of inflation problem that we're in," Matthews said. "So hopefully, that's signaling that a good amount of the energy prices that we're all paying right now are not yet being passed on in any significant way to the non-energy components of our economy. That probably will happen at some point, but as yet, the pass-on phenomenon is not happening very much."

Along the Wasatch Front, transportation costs increased 3.9 percent in September, followed by an 0.8 percent price increase for clothes and a 0.7 percent increase for groceries. Health care costs rose 0.1 percent last month, according to the Wells Fargo report. All other categories remained stable.

Nationally, the Labor Department reported that energy prices shot up by 12 percent, led by a 17.9 percent surge in gasoline prices. Natural gas prices rose by 12.1 percent, and home heating oil prices jumped 12.7 percent.

Food costs were up a modest 0.2 percent nationwide in September as the cost of beef and dairy products actually declined.