US Inflation Remains Tame, October 2010 Consumer Prices Rise 0.2%

US Inflation marched along slowly in October 2010 as Americans paid less for cars, trucks, clothing, tobacco, and natural gas, according to the latest consumer prices data released by the government on Wednesday.

Prices did rise modestly in October, however, thanks in large part to higher energy costs. But excluding those costs, the annual core US inflation rate increased by the smallest level since the government started tracking the data.

The Consumer Price Index (CPI), the most closely watched indicator of US inflation, edged up 0.2 percent in October after an increase of 0.1 percent in September, the Labor Department said.

Leading gains for a fourth straight month were energy prices, rising 2.6 percent following a 0.7 percent increase in the previous month. Gasoline prices soared 4.6 percent — the fastest pace since July, after a pick-up of 1.6 percent in September.

"As has frequently been the case in recent months, an increase in the energy index was the major factor in the all items seasonally adjusted," the U.S. Bureau of Labor Statistics reported. "The gasoline index rose for the fourth month in a row and accounted for almost 90 percent of the all items increase."

Core prices, which strip out volatile food and energy costs, remained unchanged for a third straight month after falling 0.1 percent in July.

US Inflation advanced 1.2 percent in the past year, a touch higher than the 1.1 percent rise in September. But core inflation on an annual basis climbed just 0.6 percent — the lowest 12-month increase since record-keeping began in 1957. Core inflation rose 0.8 percent over the previous 12 months as reported in September. That was the smallest gain since March 1961. The reading during each of the five months before then had been 0.9 percent, which was the lowest since January 1966. The levels are below the Federal Reserve’s preferred range of 1-2 percent.

"There is no indication of inflation pressure," Chris Low, chief economist at FTN Financial in New York, said and was quoted on Bloomberg. "Given the criticism the Fed has taken recently, especially over the potentially inflationary aspects, it’s very market friendly in that it should help push back against some of that criticism."

Consumer prices as reported by the Labor Department follow:

October 2010 Consumer Prices – Gains (%)

Apr May Jun Jul Aug Sept Oct 12
Month
All items -0.1 -0.2 -0.1 0.3 0.3 0.1 0.2 1.2
  Food 0.2 .0 .0 -0.1 0.2 0.3 0.1 1.4
    Food at home 0.2 .0 -0.1 -0.1 .0 0.3 .0 1.4
    Food away from home 0.1 0.1 0.1 .0 0.3 0.3 0.1 1.4
  Energy -1.4 -2.9 -2.9 2.6 2.3 0.7 2.6 5.9
    Energy commodities -2.1 -4.8 -4.1 4 3.8 1.8 4.4 9.9
      Gasoline (all types) -2.4 -5.2 -4.5 4.6 3.9 1.6 4.6 9.5
      Fuel oil 2.3 -1.4 -3.2 -1.6 0.9 0.8 4.7 14.5
    Energy services -0.5 -0.5 -1.6 0.8 0.4 -0.8 0.2 0.9
      Electricity 0.7 -0.4 -2.2 0.5 0.2 -0.3 0.4 0.6
      Utility (piped) gas service -4.4 -1 0.6 1.7 1.1 -2.3 -0.4 1.9
  All items less food, energy .0 0.1 0.2 0.1 .0 .0 .0 0.6
    Comm. less food, energy -0.3 0.1 0.2 0.2 0.1 -0.2 -0.2 0.1
      New vehicles .0 0.1 0.1 0.1 0.3 0.1 -0.2 0.4
      Used cars and trucks 0.2 0.6 0.9 0.8 0.7 -0.7 -0.9 8.6
      Apparel -0.7 0.2 0.8 0.6 -0.1 -0.6 -0.3 -1.2
      Medical care 0.2 0.1 .0 -0.2 0.2 0.3 0.1 2.5
    Services less energy 0.2 0.1 0.1 0.1 .0 0.1 0.1 0.8
      Shelter .0 0.1 0.1 0.1 .0 .0 0.1 -0.3
      Transportation 0.4 0.4 .0 .0 0.1 0.3 0.3 2.8
      Medical care 0.3 .0 0.4 .0 0.2 0.8 0.2 3.6

 

The Labor Department’s Consumer Price Index for November 2010 is scheduled for release on Wednesday, December 15, 2010, at 8:30 a.m. (EDT). The CPI data is used as the core engine for the US Inflation Calculator.

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