- John Ryding and Conrad DeQuadros, RDQ economics
US consumer inflation rose in October after two consecutive months of declines as the cost of gasoline and a range of other goods increased. According to the Labor Department, US consumer price index climbed 0.2% last month, reversing September's 0.2% decline. Measured on an annual basis, costs of living in the US rose 0.2% after being unchanged in September. Signs of stabilization in prices following a recent downward spiral is likely to be encouraging news for the Fed and give officials confidence that inflation will steadily move towards the central bank's 2.0% goal. Economists predict the first signs of progress sometime in the next few months, as the precipitous decline in energy prices starts to peter out of the data. The so-called core CPI, which excludes food and energy costs, gained 0.2% after a similar gain in the prior month. In the 12 months through October, the core CPI increased 1.9% after rising by the same margin in September.
The Fed tracks the personal consumption expenditures price index, excluding food and energy, which is running below the core CPI. The dollar's 18% rise against the currencies of the United States' main trading partners since June 2014 has weighed on prices of goods such as apparel and automobiles.
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