Cost of Living Keeps Rising

Image by xcode via FlickrThe cost of living in the U.S. kept rising in September, led by continued increases in food and energy prices, posing another challenge for Americans struggling with a weak job market.

Rising prices for food, shelter and other necessities led to the first cost-of-living increase in Social Security benefits since 2009. The more than 60 million Americans who receive Social Security will see their checks increase by 3.6%, the government said, but the increase will largely be offset by higher medical-care costs.

Consumer prices last month rose a seasonally adjusted 0.3% from August, the third straight monthly increase, the Labor Department said Wednesday.

Separately, U.S. home building grew in September to the highest level in 17 months. The results, however, were driven by a more than 50% monthly increase in construction of multifamily homes with at least two units, a volatile part of the market. Construction of single-family homes rose by 1.7% from a month earlier.

The weak housing market is a key concern to economic policy makers, and Federal Reserve officials monitor the consumer price data for any signs of inflation. That's because higher prices eat into the purchasing power of many Americans already struggling to find a job or to get a pay increase. Fed officials need to calibrate their interest-rate policy so that it boosts the economy and jobs without spurring too much inflation. More...