U.S. consumer prices rise 0.4% in October, post largest increase in six months

http://www.reuters.com/article/us-usa-economy-consumer-idUSKBN13C1J2?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29

U.S. consumer prices recorded their biggest increase in six months in October on rising gasoline costs and rents, suggesting a pickup in inflation that potentially clears the way for the Federal Reserve to raise interest rates in December.

Newsletter

Zero spam.

The Labor Department said on Thursday its Consumer Price Index increased 0.4 percent last month after rising 0.3 percent in September. In the 12 months through October, the CPI advanced 1.6 percent, the biggest year-on-year increase since October 2014. The CPI increased 1.5 percent in the year to September.

Last month’s increase in both the monthly and year-on-year CPI was in line with economists’ expectations.

3rd Party Advertisement

Underlying inflation, however, remained moderate. The so-called core CPI, which strips out food and energy costs, climbed 0.1 percent last month after a similar gain in September. That slowed the year-on-year increase in the core CPI to 2.1 percent from a 2.2 percent rise in September.

The Fed has a 2 percent inflation target and tracks an inflation measure which is currently at 1.7 percent.

The firming inflation backdrop and labor market that is approaching full employment are likely to encourage the U.S. central bank to raise borrowing costs at its Dec. 13-14 policy meeting.

The Fed this month left interest rates unchanged but said its monetary policy-setting committee “judges that the case for an increase in the federal funds rate has continued to strengthen.” It bank lifted its benchmark overnight interest rate last December for the first time in nearly a decade.

Inflation could push higher in the coming years if president-elect Donald Trump’s proposal to boost infrastructure and defense spending is implemented. The fiscal stimulus, against the backdrop of full employment, would entail a much faster pace of interest rate hikes than currently anticipated.

Last month, gasoline prices jumped 7.0 percent after rising 5.8 percent in September. Gasoline accounted for more than half of the increase in the CPI last month.

Food prices were unchanged for a fourth straight month. Food consumed at home declined for a sixth straight month.


Read Original Story...
HEADLINES
Canada, Mexico and Japan want to revive the Trans-Pacific Partnership free trade deal
Defense stocks at record highs after Trump signs $110 billion arms deal with Saudi Arabia
Trump’s proposal to sell oil reserve shows decline in reliance on imports, weaning off OPEC crude
Japan, Trans-Pacific Partnership members to pursue trade deal without the U.S.
OPEC seen extending output cuts as Saudi Arabia says most members on board
Oil prices rise as OPEC, other producers are expected to extend, deepen supply cuts
About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.

Speak Your Mind

*

Newsletter

Zero spam.