US Inflation in October Climbs, Annual Inflation Rate at 0.2%

US inflation advanced in October for the first time in three months, according to a government report released Tuesday, Nov. 17, 2015.

The cost of living in the United States climbed as American consumers paid more for food, energy, healthcare and housing. Overall gains were restrained as pricing increases were mostly modest and because costs declined for other items like clothing and vehicles.

Consumer prices rose 0.2% in October after falling by 0.2% in September and by 0.1% in August, the US Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what consumers pay for everything from cars to fruits and vegetables.

Seasonally adjusted gasoline prices picked up 0.4% last month after plunging 9% in September. They have tumbled 27.8% from a year earlier. The broader pricing index for energy, which combines items like gasoline, electricity and fuel oil, rose 0.3% after the prior month’s decline of 4.7%. Overall energy prices are 17.1% lower than a year ago.

Excluding the more volatile food and energy categories, so-called core consumer prices rose 0.2% in October, the same increase as in September.

"Advances in the indexes for shelter and medical care were the largest contributors to the increase, with the indexes for personal care, airline fares, recreation, alcoholic beverages, and tobacco also rising" the BLS report said. "In contrast, the indexes for apparel, new vehicles, household furnishings and operations, and used cars and trucks all declined in October."

Rents advanced 0.3% in October while medical care surged 0.7%, its largest increase since April, the BLS noted.

US inflation rose 0.2% in the past year after coming in flat for the 12-months ended September. (See annual inflation rates over the last decade.)

In rounding out the Labor Department’s report, core US inflation increased 1.9% on an annual basis. That matches the previous gain. The 12-month core reading is the benchmark inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate. The Fed has a 2% annual inflation target.

"While low inflation need not rule out a hike in the fed funds rate, at the very least it should ensure subsequent rate hikes come at a very gradual rate," MarketWatch quoted Richard Moody, chief economist at Regions Financial.

Inflation data through to October 2015 is presented below. The table shows monthly and annual percentage changes in the prices of major consumer goods and services. The US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) monitors these prices around the country, analyzes them, and then summarizes their results in monthly reports.

April 2014 – October 2015 Consumer Prices – Gains & Losses in Percent

  Apr 2015 May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 12 Month
All items 0.1 0.4 0.3 0.1 -0.1 -0.2 0.2 0.2
  Food .0 .0 0.3 0.2 0.2 0.4 0.1 1.6
    Food at home -0.2 -0.2 0.4 0.3 0.3 0.3 0.1 0.7
    Food away from home 0.2 0.2 0.2 .0 0.2 0.5 0.2 2.9
  Energy -1.3 4.3 1.7 0.1 -2.0 -4.7 0.3 -17.1
    Energy commodities -1.9 9.6 3.1 0.7 -4.1 -8.6 0.4 -27.8
      Gasoline (all types) -1.7 10.4 3.4 0.9 -4.1 -9.0 0.4 -27.8
      Fuel oil -8.4 0.7 -1.9 -3.4 -8.1 -2.4 -1.1 -32.9
    Energy services -0.5 -1.0 0.2 -0.6 0.5 -0.4 0.2 -2.9
      Electricity .0 -1.2 0.2 -0.4 0.3 -0.5 0.4 -0.5
      Utility (piped) gas service -2.6 .0 0.3 -1.4 1.3 -0.3 -0.7 -11.0
  All items less food, energy 0.3 0.1 0.2 0.1 0.1 0.2 0.2 1.9
    Commodities less food, energy 0.1 -0.1 -0.1 -0.1 -0.1 .0 -0.1 -0.7
      New vehicles 0.1 0.2 0.1 -0.2 .0 -0.1 -0.2 0.1
      Used cars and trucks 0.6 -0.4 -0.4 -0.6 -0.4 -0.2 -0.3 -1.4
      Apparel -0.3 -0.5 -0.1 0.3 0.3 -0.3 -0.8 -1.9
      Medical care 0.1 0.4 .0 0.1 0.3 -0.2 0.2 2.8
    Services less energy 0.3 0.2 0.3 0.2 0.1 0.3 0.3 2.8
      Shelter 0.3 0.2 0.3 0.4 0.2 0.3 0.3 3.2
      Transportation 0.1 0.7 0.4 -0.2 -0.3 0.1 0.2 1.8
      Medical care 0.9 0.2 -0.2 0.1 .0 0.3 0.8 3.0

 

US inflation information from the BLS is typically published around mid-month, and presents consumer prices through to the previous month. The Consumer Price Index for November and through to the latest annual period becomes public on Dec. 15, 2015.

CPI data is used in calculating inflation rates. It is the backbone for this site’s inflation adjustment calculator. The US Inflation Calculator provides accumulated inflation and the change in buying power of the dollar over time.

Leave a Reply