WASHINGTON (AP) -- Higher gas costs drove up U.S. consumer prices in September for the second straight month. But outside energy, there was little sign of inflation.
The Labor Department said Tuesday that the consumer price index rose a seasonally adjusted 0.6 percent in September, matching the August increase. In the past 12 months, prices have increased 2 percent. That's in line with the Federal Reserve's inflation target.
Food prices rose only 0.1 percent. The cost of meat, chicken and eggs fell. Dairy prices rose.
Excluding volatile food and energy costs, prices rose just 0.1 percent. In the past year, so-called core prices have increased 2 percent.
Modest inflation leaves consumers with more money to spend, which can boost growth. Low inflation also allows the Federal Reserve to continue with its efforts to rekindle the economy. If the Fed were worried that prices are rising too fast, it might have to raise interest rates.
Gas prices rose sharply over the summer and into September, but have since come down. The average price for a gallon of gas nationwide was $3.77 on Tuesday, about 9 cents below last month's level.
The summer's drought in the Midwest could ultimately affect grocery prices. The drought caused spikes in the cost of corn, soybeans and other grains.
Those grains are used in animal feed, which pushes up the price of chicken, beef and pork. And corn is also used in most products found throughout the supermarket, from cereals to soft drinks to cosmetics.
The economy remains the top issues for voters with just three weeks left before Election Day. It will be front and center Tuesday night when President Barack Obama and GOP challenger meet at New York's Hofstra University for the second of three debates.
A batch of recent data suggests consumers are gaining confidence in the economy.
Consumer sentiment rose to a five-year high in October, according to a survey by the University of Michigan. And Americans stepping up their spending at retail businesses in September for the second straight month, buying more cars and iPhones.
The job market is also looking a little better. The unemployment rate fell to 7.8 percent last month, the first time the rate has been below 8 percent since January 2009. And employers added an average of 146,000 jobs per month in the July-September quarter - double the average number created during the April-June quarter.
Still, job growth remains too weak to rapidly bring relief to the more than 12 million Americans who are unemployed.
Last month, the Federal Reserve said it would try and stimulate the economy with a pair of bold steps. It is purchasing mortgage bonds to try and lower long-term interest rates and make home-buying more affordable. And it plans to keep short-term interest rates low even after the economy accelerates.