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Updated from 9:37 a.m. EDT

Surging energy costs pushed consumer prices higher than expected in September, giving the

Federal Reserve

one more reason to remain vigilant on inflation.


Consumer Price Index

rose 0.5% in September,

following a 0.1% decline in August, the

Labor Department

reported Wednesday. Much of the increase was due to a steep 3.8% month-on-month rise in energy costs.

The core CPI -- which excludes the often volatile food and energy sectors and gives a clearer picture of inflation -- rose 0.3%, mainly from increases in clothing and tobacco prices, following August's 0.2% jump. Both the overall figure and the core index were slightly higher than the consensus among economists, which predicted increases of 0.4% and 0.2%, respectively, according to


. Year on year the core rate is up 2.6%.

But the report showed that consumer goods -- goods excluding food, energy and tobacco -- actually fell, down 0.1% from a year ago.

However, the jump is likely not high enough to raise the specter of an interest rate hike. Rather, it substantiates what the Fed has already said -- that it will remain on alert for inflation signals.

"Inflation is still behaving itself," said Bill Cheney, chief economist at

John Hancock Financial Services

. "Spiking energy prices pushed up the overall rate and unexpected rise in apparel prices pushed up the core rate. Absent those volatile items, nothing has changed.

"I can't imagine this report will cause the Fed to reconsider its stance on rates."

Other economists were similarly unalarmed.

"Outside of energy, inflation remains muted," said Gerald Cohen, senior economist at

Merrill Lynch

. "With the economy slowing, core inflation should move lower in the coming months."

Wednesday's consumer price data was the second recent figure to suggest that inflation may not be as benign as previously thought. On Oct. 13, the Labor Department

reported that wholesale prices rose to their highest level in seven months in September, an indication that rising oil prices could lead to general price inflation.

The Fed has raised interest rates six times over the last 16 months, although it has kept rates steady at its most recent meetings.

In other economic news, the construction of new homes fell below Wall Street expectations in September.

Housing starts

rose 0.3% to a seasonally adjusted 1.53 million in September, the

Commerce Department

reported Wednesday. Economists expected the figure to reach an annual pace of 1.545 million, according to


. The figure is down 6% from a year ago.

At the same time, the government revised downward its August housing starts figure to a 0.1% decline and a 1.525 million rate. This compares with the

original estimate of a 0.3% increase and a 1.53 million annual rate.