Annual U.S. Inflation Down 0.2%, Consumer Prices Rise 0.3% in October

U.S. consumer prices rose more than expected in October as higher fuel and new and used car prices drove up the cost of living for Americans, according to government data released Wednesday.

The newest Labor Department monthly report reveals that the Consumer Price Index (CPI) edged 0.3% higher, exceeding the 0.2% expectations voice by economists. The increase — the fifth in six months — follows a September elevation of 0.2% which came on the heels of a 0.4% rise in August.

"The latest CPI report does not alter the underlying picture and we continue to expect weaker inflation in 2010 as a result of the substantial amount of spare capacity in the economy," wrote Anna Piretti, an economist for BNP Paribas, who was cited on MarketWatch.

Energy prices were also up for the fifth time in the last six months. The indexes for gasoline, fuel oil, natural gas, and electricity all increased. New car prices rose sharply, jumping at a rate that has not been seen since the 1980s.

In October, core consumer prices or core inflation, which excludes volatile food and energy prices, rose by 0.2% after increasing by the same level in September. That was also 0.1% more than many analysts had expected. Continue reading Annual U.S. Inflation Down 0.2%, Consumer Prices Rise 0.3% in October

Inflation Calculator, US Inflation Rates and CPI Data Updates

The cost of living in the US rose more than expected in October, as Americans paid more for fuel, food and new cars, the government reported Wednesday.

Consumer prices rose 0.3% in October after a 0.2% increase in September, according to the latest Consumer Price Index (CPI) data released by the Labor Department. The increase is 0.1% higher than many economists had forecasted. The good news for consumers is that prices are down 0.2% from a year earlier.

"I don’t see anything in the report that suggests there’s any real inflation flare-up," Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said on Bloomberg. "The Fed is comfortably on hold."

In October, energy prices climbed 1.5% while food prices advanced 0.1%. Prices for new cars rose 1.6%, the biggest increase in 28 years. Continue reading Inflation Calculator, US Inflation Rates and CPI Data Updates

U.S. Producer Prices Rise in October, but Core Wholesale Inflation Falls

U.S. producer prices in October increased 0.3% as a result of higher food and energy prices, but core wholesale inflation, which excludes the volatile food and energy costs, declined 0.6%, according to a government reported released Tuesday.

The Labor Department’s Producer Price Index, which measures inflation pressures before they reach the consumer, has increased twice during the past four months. Prices declined 0.6% in September following a 1.7% increase in August.

Energy prices at the wholesale level increased 1.6% in October after a decline of 2.4% in September. Gasoline costs climbed 1.9%, accounting for almost half of the increase. Food prices also rose 1.6%, following a 0.1% decline in the month prior. Fresh and dry vegetables prices jumped 24.2% and accounted for about half of the increase.

"There is little doubt that over the last few months, inflation has picked up in the economy," wrote Dan Greenhaus, an economist for Miller Tabak & Co. who was cited on MarketWatch. "But in a general sense, the overall slack in the economy and weakness in the labor market will work to hold down broader inflation measurements over the coming quarters."

Compared with a year earlier, producer prices were 1.9% lower in October. Continue reading U.S. Producer Prices Rise in October, but Core Wholesale Inflation Falls

US Inflation Remains ‘Subdued’, Says Fed

The Federal Reserve ended its two-day meeting Wednesday, and as expected the Federal Open Market Committee (FOMC) did not raise interest rates. Further, in an exact parallel to its last statement, it noted that US inflation remained under control, stating:

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

September inflation data indicated that consumer prices declined 1.3% during the prior 12 months and that core annual inflation, which excludes volatile food and energy prices, rose just 1.5% — well within the Federal Reserve’s comfort range of between 1%-2%.

It appears its benchmark federal funds rate will remain virtually at zero for some time as the "economic activity is likely to remain weak for a time," according to the FOMC.

"The one consistent theme with all the Fed speakers is that they’re not going to raise rates any time soon," Drew Matus, an economist at Bank of America-Merrill Lynch, was quoted on NYTimes.com. "That is the one consistent theme that gets hammered home time and again."

In a unanimous vote, the FOMC decided to keep its key rate unchanged in a range of zero to 0.25 percent.

The released Fed statement follows in its entirety: Continue reading US Inflation Remains ‘Subdued’, Says Fed