WASHINGTON, Nov 14 — US consumer inflation got a bump in October, as prices for gasoline and electricity shot up, rising along with the cost of shelter and medical care, the government reported today.
The increase in overall consumer prices was the largest in nine months, but one closely-watched measure suggest price pressures remained tame.
Costs for used cars and trucks also jumped, reversing declines in September, but new auto prices fell for the second month in a row, according to the Labor Department report.
The Consumer Price Index rose 0.3 per cent for the month, matching analyst expectations and posting the biggest gain since January.
The gasoline index jumped three per cent and prices for electricity gained 1.7 per cent, offsetting falling prices for food and natural gas services.
Compared to October of last year, the index rose 2.5 per cent, up from the 2.3 per cent annual gain recorded in September.
But when erratic food and fuel prices are stripped out, the “core” CPI rose by a slower 0.2 per cent over September, also matching analyst expectations.
Compared to October of last year, the core index actually slowed to 2.1 per cent, down a tenth from September’s reading.
This was despite a record 4.9 per cent annual gain in the cost of appliances, spurred higher by a 9.9 per cent increase in the cost of washing machines, which are subject to President Donald Trump’s steep import duties.
The slower year-on-year gain in the core CPI could calm Wall Street fears that the Federal Reserve will be more aggressive about raising interest rates.
With unemployment near a 50-year low and job creation continuing unabated, the Fed has projected four more rate increases before the end of 2019.
Prices for used cars and trucks rose 2.6 per cent and the cost of shelter also grew, offsetting decreases for clothing and new cars.
Ian Shepherdson of Pantheon Macroeconomics said the data remained “calm, with no real evidence of broad-based pressures in either direction.”
In a separate report today, the Labor Department also said worker pay failed to keep pace with inflation in October, rising by a tenth of a percentage point less than CPI — resulting in a net loss employee earnings of 0.1 per cent for the month. — AFP
