October CPI +0.3

I had been saying that I was expecting inflation to run a bit hot in October. This morning’s CPI report partially vindicates my view.

For October, consumer prices rose by 0.3%. That’s the biggest increase in nine months. The core rate rose by just 0.1%.

In the last 12 months, the regular CPI is up 2.5% while the core rate is up by 2.2%.

The U.S. central bank left interest rates unchanged last Thursday, but is expected to increase borrowing costs in December for a fourth time this year. In its statement after last week’s policy meeting, the Fed noted that annual inflation measures “remain near 2 percent.”

Last month, gasoline prices rebounded 3.0 percent, accounting for more than one-third of the increase in the CPI, after slipping 0.2 percent in September.

Food prices fell 0.1 percent after being unchanged in September. Food consumed at home declined for a second straight month in October. Food prices were held down by cheaper bread, cereals, pork, dairy products, fruits and vegetables.

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3 percent in October after advancing 0.2 percent in the prior month. The rent index gained 0.2 percent.

Healthcare costs increased 0.2 percent last month after a similar gain in September. Apparel prices edged up 0.1 percent after jumping 0.9 percent in September.

Oil had fallen for the last 12 days in a row. It looks like that streak will end today.

Posted by on November 14th, 2018 at 10:03 am


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