US consumer prices barely up in October
In this Thursday, Oct. 12, 2017, photo, prices appear on shoes in a window display at a Fabco Shoes store in Jersey City, N.J. On Wednesday, Nov. 15, 2017, the Labor Department reports on U.S. consumer prices for October. (AP Photo/Swayne B. Hall)
November 15, 2017 - 6:03 AM
WASHINGTON - U.S. consumer prices edged up a slight 0.1 per cent in October, the smallest gain in three months as energy prices retreated.
The tiny October gain in consumer prices followed increases of 0.5 per cent in September and 0.4 per cent in August, the Labor Department reported Wednesday. After two months of big gains in the cost of energy, those prices fell 1 per cent in October. Gasoline prices were down 2.3 per cent.
Core inflation, which excludes food and energy, rose a modest 0.2 per cent in October after a 0.1 per cent rise in September. Over the past 12 months, inflation is up 2 per cent, while core prices have risen 1.8 per cent.
Even though the current economic expansion is in its ninth year, inflation pressures have remained modest.
Inflation by a measure preferred by the Federal Reserve has been stuck well below the Fed's target of 2 per cent annual price gains. But private economists still believe the central bank will boost its benchmark interest rate for a third time when it meets again next month.
Despite this year's slowdown in inflation, Fed Chair Janet Yellen and other Fed officials have expressed the belief that tight labour markets will soon start to push up wage gains, which would then boost inflation. Unemployment in October fell to 4.1 per cent, the lowest level in nearly 17 years.
The Fed has raised its benchmark lending rate twice this year in quarter-point moves in March and June. The rate remains at a still-low 1 per cent to 1.25 per cent, and Fed officials have continued to project that rate increases will be gradual.
At the moment, the Fed is projecting three rate increases in 2018. Many analysts believe that forecast will change little even as the makeup of the Fed undergoes change. President Donald Trump has announced that he plans to replace Yellen as Fed chair with Fed board member Jerome Powell, a centrist Republican who is expected to follow Yellen's gradual approach to raising rates.
For October, food prices were flat and have risen by a modest 1.3 per cent over the past year. The 1 per cent fall in energy prices left them up 6.4 per cent over the past 12 months.
Prices of new cars, recreation and clothing all declined in October. Prices for medical care, used cars, tobacco products and car insurance rose.
News from © The Associated Press, 2017