Consumer prices rose 0.2% in September, hotter than expected; annual rate increased 2.4%

The pace of price increases over the past year took an unexpected step higher in September as policymakers contemplate their next move on interest rates, according to a Labor Department report Thursday.

The consumer price index, a broad gauge measuring the costs of goods and services across the U.S. economy, increased 0.2% for the month, putting the annual inflation rate at 2.4%. Both readings were 0.1 percentage point above the Dow Jones consensus.

Excluding food and energy, core prices increased 0.3% on the month, putting the annual rate at 3.3%. Both core readings also were 0.1 percentage point above forecast.

Much of the inflation increase — more than three-quarter of the move higher — came from a 0.4% jump in food prices and a 0.2% gain in shelter costs, the Bureau of Labor Statistics said in the release. That offset a 1.9% fall in energy prices.

This is breaking news. Please check back for updates.