The cost of energy rose for the first time this year and drove the Consumer Price Index 0.3 percent higher in July.

The energy index posted its first increase since January and accounted for over two thirds of the seasonally adjusted all items increase," noted the Labor Department’s CPI July report. "Both the gasoline and household energy indexes turned up in July after a series of declines. The food index, in contrast, declined in July, largely due to the fourth consecutive decline in the fruits and vegetables index."

The CPI is the most closely watched indicator for inflation. In contrast to July, prices during the months of June, May and April fell 0.1 percent, 0.1 percent and 0.2 percent. Consumer prices rose 0.1 percent in March.

Energy prices were up 2.6 percent after falling 2.9 percent in June. Gasoline was the biggest gainer, jumping 4.6 percent against a 4.5 decline in the prior month. Food prices fell 0.1 percent last month as compared to a flat reading in June.

Stripping away volatile energy and food costs, the so called core inflation rate grew 0.1 percent in July.

"Core inflation remains pretty low," Paul Ashworth, a senior economist at Capital Economics, said and was quoted on CNNMoney.com. "But the near-term risks of it plunging all the way to zero or below have certainly receded."

Other areas of prices increases in July included new and used vehicles, clothing, tobacco, and housing. Prices fell for airfares, medical care and household furniture.

Inflation over the past 12 months rose 1.2 percent after an annual inflation of 1.1 percent reported for June. Core inflation gained 0.9 percent on an annual basis, which was the same level as June, May and April — the smallest 12-month increase since January 1966.

The annual core rate remains a notch below the Federal Reserve’s target range of 1 percent – 2 percent.

July Consumer Price Details

The Consumer Price Index for August 2010 is scheduled to be released on Friday, September 17, 2010, at 8:30 a.m. (EDT). The CPI data is used as the core engine for the U.S. Inflation Calculator.

The Consumer Price Index dropped 0.1% in June, marking the third straight monthly decline since March when prices edged 0.1% higher, according to Labor Department data. The index is the most closely watched indicator for inflation. The decline follows a 0.2% slide in May and a 0.1% dip in April. The last time consumer prices fell for three consecutive months was between October and December 2008.

Sliding energy prices were the biggest contributor, down 2.9% in June, the same decline as in May. Gasoline prices plunged 4.5% to account for "most of the decrease," the Labor Department said.

"The CPI is quite low, it’ll reinforce the thinking within the Fed that they can afford to keep interest rates low," Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto, was noted on Reuters.

Stripping out volatile energy and food prices, the core inflation rate rose 0.2% — the biggest gain since October 2009, after rising 0.1% in May. Core consumer prices were unchanged in April and March.

"Inflation is essentially a non issue right now, and that’s good news for consumers who feel stretched and uncertain. There are some bargains to be had," economist Joel Naroff, president of Naroff Economic Advisors, was quoted by the AP. "Once consumers get more confident and are willing to spend again, they will see that stores are filled with goods at prices they like."

Aside from flat food and falling energy costs, most other areas of the index showed slightly higher prices, calming deflation worries.

"Inflation will be tame because there is so much slack in the economy, but this number should lessen deflation fears somewhat," James O’Sullivan, chief economist at MF Global Ltd. in New York, was quoted on Businessweek.

Deflation is a broad-based decline in consumer prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain point. If prices mark sustained deflationary levels that strike below the cost to produce goods and services, economic turmoil can ensue with production cuts, payroll reductions and deepened unemployment.

Inflation over the past 12 months rose 1.1%, following May’s 2.0%, 12-month inflation reading. Core consumer prices increased 0.9% on an annual basis, which was the same level as in May and April — the smallest 12-month increase since January 1966.

The annual core rate remains a notch below the Federal Reserve’s target range of 1% – 2%.

June Consumer Price Details

Rising prices include:

• Used car and truck prices climbed 0.9% in June after rising 0.6% in May. They are up 16.1% over the past
  year.
• Clothing prices jumped 0.8% last month following a more modest increase of 0.2% in May. Prices are still down 0.4% from a year ago, however.
• Shelter costs, which account for about one-third of the CPI, matched May’s 0.1% increase. They were unchanged in April and have declined 0.7% over the past year.
• Natural gas costs climbed 0.6% after declining 1.0% in May.

Declining prices include:

• The energy index fell 2.9% for the second month in a row, after declining 1.4% in April. They have climbed 3.0% over the past 12 months, however.
• Airline fares declined 0.6% in June after rising 1.9% in May and 2.2% in April.
• Gasoline prices dropped 4.5% following a plunge of 5.2% in the prior month. They are 3.0% higher than a year ago.
• Fuel oil prices were down 3.2% after a 1.4% decline in May. They are up 16.6% on the year, however.
• The index for electricity decreased 2.2%. They were down 0.4% during the prior month.
• Fruits and vegetables prices declined 1.3%. They fell 1.1% in May.

Food prices were flat for a second straight month, after rising 0.2% in April. Medical care commodities prices were also flat following a 0.1% increase in May.

The CPI report comes on the heels of the government’s release of the Producer Price Index on Thursday. The PPI is the measure of wholesale inflation, or prices businesses (farms and factories) pay for their goods. Producer prices slid 0.5% in June.

The Consumer Price Index for July 2010 is scheduled to be released on Friday, August 13, 2010, at 8:30 a.m. (EDT).

The Consumer Price Index, the most closely watched indicator for inflation, fell 0.2% in May after edging 0.1 lower in April, the Labor Department said. Flat food costs and lower energy bills led by plunging gasoline prices aided in trimming U.S. consumer prices.

"The weak recovery has its upside, declining energy costs and that is helping take pressure off the cash-strapped consumer," Joel Naroff, president of Naroff Economic Advisors, was quoted by the AP.

Core consumer prices, which exclude volatile food and energy prices, rose 0.1% in May, marking only the second monthly increase this year. The core inflation rate was unchanged in April and March, rose 0.1% in February, and declined 0.1% in January.

"The core inflation rate remains uncomfortably low," Baird said. "The economy may be expanding, but at a pace that isn’t inspiring." Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors, said in a research note cited by CNNMoney.com. "Muted inflation, and the risk of deflation, seems likely to provide the Fed continued incentive to maintain its accommodative stance."

Deflation is a persistent decrease in general prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain point. If prices mark sustained deflationary levels that strike below the cost to produce goods and services, economic turmoil can ensue with production cuts, payroll reductions and deepened unemployment.

Inflation over the past 12 months is up 2.0%, following a 2.2% reading in the 12 months ending in April. Core consumer prices increased 0.9% on an annual basis, which was the same level as April and the smallest 12-month increase since January 1966.

The annual core rate remains a notch below the Federal Reserve’s preferred range of 1%-2%.

May Consumer Price Details

Rising prices include:

• Used car and truck prices were up 0.6% in May after rising 0.2% in April. They are up 16.2% over the past
  year.
• Clothing prices rose 0.2% in May. They were down 0.7% in April.
• Airline fares rose 1.9% in May after increasing 2.2% in April.
• Medical care commodities climbed 0.1% in May. They were up 0.2% in April.
• Shelter costs, which account for about one-third of the CPI, moved up 0.1 in May. They were unchanged in April and have declined 0.7% over the past year.

Declining prices include:

• The energy index fell 2.9% after declining 1.4% in April. However, they have climbed 14.7% over the past 12 months.
• Gasoline prices declined 5.2% in May. They declined 2.4% in April. They are 27.0% higher than a year ago.
• Fuel oil prices fell 1.4% in May after jumping 2.3% in April. They are up 27.1% on the year.
• Natural gas costs were 1.0% lower after declining 4.4%.
• The index for electricity decreased 0.4% after rising 0.7% during the prior month.
• Fruits and vegetables prices declined 1.1%. They were down 0.2% in April.

Food prices were unchanged after rising 0.2% in April.

"We do not have any inflation pressure," Ward McCarthy, chief financial economist at Jefferies & Co. in New York, said today in an interview on Bloomberg Radio. "On the international level, there is tremendous price competition."

The Consumer Price Index, the government’s most closely watched indicator for inflation, edged 0.1% lower in April. The index was helped by mostly subdued energy costs. It was the first decline in the CPI since March 2009, and two notches away from a 0.1% increase most economists were expecting, which was the same level reported in March.

Energy costs dropped 1.4% last month, with gasoline prices leading the declines at minus 2.4%. Food prices were up 0.2%.

Excluding volatile food and energy prices, the so called core inflation rate in April was unchanged for a second straight month.

"Inflation continues to be a non-issue," economist Anika R. Khan of Wells Fargo Investments said in a research note.

Energy prices have soared 18.5% over the last year. That led in driving inflation 2.2% higher over the past 12 months compared to a 2.3% increase during the 12 months ending in March. However, core inflation rate rose a modest 0.9%.

"The continuing stability of the index for all items less food and energy has resulted in an increase over the last 12 months of 0.9 percent, the smallest 12-month increase since January 1966," the Labor Department’s Consumer Price Index Summary report stated.

The 12-month core rate is actually below the Federal Reserve’s comfort range of 1%-2%, which raises deflationary concerns for some.

"The latest CPI data confirms that the Fed has a free hand to concentrate on growth and can extend the ‘extended period’ language for an extended period," Alan Ruskin, strategist at RBS Securities, was quoted on FT.com. "The bad news is that the softness we are seeing in core prices could awaken fears of deflation, notably if we see a renewed downturn."

Deflation is a persistent decrease in general prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain point.

"The speed of disinflation is now alarmingly rapid, and it adds weight to our long-held view that the U.S. will come perilously close to deflation over the next year or so," Ian Shepherdson, chief U.S. economist for High Frequency Economics wrote and was cited on MarketWatch.

If prices mark sustained deflationary levels that strike below the cost to produce goods and services, economic turmoil can ensue with production cuts, payroll reductions and deepened unemployment.

April Consumer Price Details

Rising prices include:

• Fuel oil prices jumped 2.3% in April after rising 0.7% in March. They are up 28.0% on the year.
• The index for electricity rose 0.7% following a 2.1% increase in the prior month.
• Used car and truck prices advanced 0.2% after a 0.5% increase. They are up 16.6% over the past
  year.
• Food prices are 0.2% higher, matching the prior month’s increase.
• Medical care expenses rose 0.2% in April. They were up 0.3% in March.
• Airline fares increased sharply in April, rising 2.2%.

Declining prices include:

• Gasoline prices ended down 2.4% after falling 0.8% in March. However, they are 38.3% higher than a year ago.
• A 4.4% decline in natural gas more than offset the above stated increases in fuel oil and electricity.
• Fruits and vegetables prices, which rose 3.4% in March, declined 0.2% in April.
• Clothing prices fell 0.7%. They were down 0.4% in March and are 0.9% lower over the past year.

Shelter costs, which account for about one-third of the CPI, were unchanged in April. They declined 0.1% in March. New vehicle prices were also flat.

The CPI report comes on the heels of the government’s release of the Producer Price Index on Tuesday. The PPI is the measure of wholesale inflation, or prices businesses (farms and factories) pay for their goods. Producer prices in April also declined 0.1% after rising 0.7% in March.

The Consumer Price Index, the government’s most closely watched reading for inflation at the consumer level, rose 0.1% in March. February’s CPI was flat and marked the first time prices had not advanced since March 2009.

"Inflation as a concern is relegated to the distant future," Guy Lebas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said on Bloomberg. "It gives the Fed the flexibility to keep rates low for a while."

Helping to keep prices contained in March were flat energy prices, as increased electricity costs were offset by lower gasoline and natural gas bills. For the past year, however, energy prices have soared 18.3%, with gasoline leading at 41.1%.

Those costs drove inflation up 2.3% over the past 12 months compared to a 2.1% increase the Labor Department reported during the 12 months ending in February.

Core consumer prices, which strip out volatile food and energy prices, were unchanged during the month of March. While core inflation was still up 1.1% from a year earlier, it was the smallest gain since 2004. Month prior respective increases were 0.1% and 1.3%.

"The rate of inflation was very low this month and still somewhat below the historical average," Andres Carbacho-Burgos, an economist for Moody’s Economy.com, was cited on CNNMoney.com. Adding that the annual rate has historically been between 2.4% to 2.5% and core inflation rate between 1.7% to 1.8%.

The 12-month core inflation rate is right within the Federal Reserve’s comfort range of 1%-2%.

March Consumer Price Details

Rising prices include:

• Prices for fruits and vegetables soared 3.4% after decreasing 0.1% in February. (Fresh fruits and vegetables jumped 4.6%.)
• Fuel oil prices rose 0.7% following a 2.4% decrease in February. They are up 27.2% on the year.
• The index for electricity jumped 2.1% after declining 0.5% in the prior month.
• New vehicles prices rose 0.1% for the second straight month. They are 3.0% higher on the year.
• Used car and truck prices climbed 0.5% after a 0.7% increase. They are up 16.3% over the past
  year.
• Food prices moved up 0.2% following a 0.1% increase. They have climbed 0.2% over the past 12 months.
• Medical care expenses rose 0.3% in March after rising 0.5% in February.

Declining prices include:

• Gasoline prices dropped 0.8% after retreating 1.4% in February and surging 4.4% in January. They have soared 41.4% compared to a year ago.
• Natural gas costs were down 0.7% after rising 3.9% in February and increasing 3.5% in January.
• Clothing prices fell 0.4%. The were down 0.7% in February.
• Shelter costs, which account for about 1/3 of the CPI, were retreated 0.1% in March. They were flat in February and are down 0.6% over the past year.

Energy prices were flat in March, after declining 0.5% in February and jumping 2.8% in January, which was the ninth consecutive increase. Energy is up 18.3% in the past 12 months. Additionally, dairy and related products prices remained unchanged in March as well.

To compare how the buying power of the U.S. dollar has changed over time, check out the updated Inflation Calculator.

The Consumer Price Index (CPI), which is the government’s most closely watched barometer for measuring inflation at the consumer level, was flat in February, breaking away from five straight months of 0.2% increases. The month marks the first time since March 2009 when consumer prices did not climb, indicating tame inflation and reinforcing the Fed’s recent statement saying that inflation would remain subdued for "some time."

"Inflation is certainly no imminent threat to the U.S. economy," David Resler, chief economist at Nomura Securities International Inc. in New York, said on Bloomberg. Resler forecasted that prices would remain unchanged "It ties in with the Fed’s statement," he added.

The energy pricing index fell 0.5% in February after rising 2.8% during the prior month. Food prices rose a modest 0.1%.

Striping out volatile food and energy prices, core consumer prices rose 0.1% last month following a decline of 0.1% in January.

“Core inflation continues to be a non-issue in the near-future, so the Fed’s easy monetary policy can continue into the third and fourth quarter of this year without inflation being an issue,” Adam York, an economist at Wells Fargo, said on CNNMoney.com.

Annual inflation advanced 2.1% versus the 12-month rate of 2.6% reported in January. Costs in the past year were again led by energy prices which increased 14.4%.

The core rate was up 1.3% during the same time frame — the smallest gain since February 2004. The inflation level is right within the Federal Reserve’s comfort range of 1%-2%.

February Consumer Price Details

Rising prices include:

• Used car and truck prices rose 0.7% after a 1.5% increase. They are up 14.1% over the past
  year
• New vehicles prices rose 0.1% following a decline of 0.5% in January. They are 3.5% higher on the year.
• Natural gas costs were up 3.9% in February after increasing 3.5% in January
• Food prices moved up 0.1%, although they are down 0.2% over the past 12 months
• Medical care expenses climbed 0.5% for the second straight month

Declining prices include:

• Energy prices declined 0.5% in February after rising 2.8% in January, which was the ninth consecutive increase. Over the past 12 months, energy has risen 14.4%.
• Gasoline prices fell 1.4% after jumping 4.4%. They have soared 36.8% in the past 12 months.
• Shelter costs, which account for about 1/3 of the CPI, were flat in February. They are down 0.4% over the past year.
• Fuel oil prices were down 2.4% following a 6.1% increase. They are up 19.3% on the year.
• Airfares decreased 0.7% after declining 2.5% in January
• The index for electricity declined 0.5% — its third consecutive decrease
• Clothing prices fell 0.7% following a decline of 0.1%
• Dairy and related products decreased 0.1% after jumping 2.1% in January
• Prices for fruits and vegetables decreased 0.1%

To compare how the buying power of the U.S. dollar has changed over time, check out the updated Inflation Calculator.

However, the price of energy continues to be a burden with increases during the month and year that drove inflation higher over the past 12 months, according to the Labor Department.

The Consumer Price Index (CPI), which is the government’s most closely watched barometer for measuring inflation at the consumer level, rose 0.2% in January for the fifth consecutive month. The figure is lower than the 0.3% increase most analysts were forecasting.

"Despite the extraordinary fiscal and monetary stimulus injected into the economy, many prices are still stagnant or declining," Dan Greenhaus, chief economic strategist for Miller Tabak, wrote in a research note on Friday that was quoted on NYTimes.com. Adding, "The pricing situation still remains fragile."

Leading the increase were higher fuel costs, and a modest up tick in food prices. Excluding volatile food and energy prices, the core CPI fell 0.1% in January — the biggest decline since December 1982.

"This is even more surprising of an outcome when one considers that most other advanced nations have shown some recent inflation strength," said TD Securities economics strategist Ian Pollick in a commentary cited on CBC News. "Having said that, while we don’t expect core prices to remain negative, our view for the remainder of the year is for core prices to trend lower, underscoring the large degree of slack in the U.S. economy," Pollick added.

The same December reading was up by 0.1%.

Annual inflation came in at 2.6%, led by energy prices that jumped 19.1% over the past 12 months. The inflation figure is right within the Federal Reserve’s comfort range of between 1%-2%.

"The broader picture remains one of subdued inflation, and this gives the Fed ample reason to stay on the sidelines until at least very late in the year," Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, was quoted on Bloomberg.

Inflation hit 2.7% in December during the prior 12 months.

January Consumer Price Details

Rising prices include:

• Used car and truck prices rose 1.5% and have increased 12.9% over the past
  six months
• Energy prices rose 2.8% in January, its ninth consecutive increase. Over the past 12 months, the
  energy has risen 19.1%.
• Gasoline prices jumped 4.4%, and have soared 51.3% in the past 12 months
• Fuel oil prices increased 6.1%
• Natural gas costs were up 3.5%
• Food prices moved up 0.2%, although they are down 0.4% over the past 12 months
• Medical care expenses climbed 0.5% — the largest increase in 2 years
• Dairy and related products prices jumped 2.1%
• Prices for fruits and vegetables increased 1.3%

Declining prices include:

• Airfares declined 2.5% after increasing for six straights months
• Lodging away from home prices fell 2.1% — hotel and motel rates dropped 2.1%
• Clothing prices fell 0.1%
• New vehicles prices declined 0.5%
• The index for electricity declined 1.1%

To compare how the buying power of the US dollar has changed over time, check out the updated Inflation Calculator.

US consumer prices increased modestly at 0.1% last month, which was down from a 0.4% increase in November and marked the lowest reading since July. Most forecasters were expecting a 0.2% increase.

"Consumer pricing pressures remain very subdued," Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, was quoted on Bloomberg. "It gives the Fed further leeway to continue keeping rates where they are well through 2010."

The government’s Consumer Price Index, which measures inflation pressures at the consumer level, rose 2.7% on an annual basis in 2009 — the biggest gain since 2007. By comparison, American’s paid just 0.1% more for goods and services in 2008. The contrasting difference was primarily driven by higher energy prices, with gasoline up 53.5% in 2009 after declining 43.1% in 2008.

The so-called core CPI, which excludes the more volatile food and energy items, also increased 0.1% in December. Housing prices, which account for more than a third of the CPI index, remained unchanged and contributed in containing prices.

"Core inflation was held down by housing prices," Mark Vitner, an economists at Wells Fargo Securities, said on CNNMoney. "That’s likely to continue because housing is in over supply."

December’s core CPI was in line with expectations and comes on the heels of an unchanged reading in November. Core inflation rose 1.8% over the past 12 months after increasing 1.7% in November. The inflation figure is right within the Federal Reserve’s comfort range of between 1%-2%.

Consumer prices in December

Rising December prices include:

• Used car and truck prices rose 2.5% compared to a 2.0% increase during the month prior
• Energy prices increased 0.2% after soaring 4.1% in November
• Gasoline prices advanced 0.2% after jumping 6.4% in the month prior
• Fuel oil prices climbed 1.1% following a surge of 9.0%.
• Food prices moved up 0.2%. They were up 0.1% in November.
• Airfares increased for the sixth consecutive month, rising 2.4%
• Medical care prices climbed 0.1%
• Tobacco prices soared 30.1% in 2009
• Dairy and related products prices advanced 0.5% after declining 0.7%
• Lodging away from home prices also increased 0.5% after a drop of 1.5%
• Clothing prices rose 0.4% after a decline of 0.3% in November
• Prices for fruits and vegetables and for other food at home both rose 0.3%

Declining December prices include:

• New vehicles prices declined 0.3% after a 0.6% rise in November
• Natural gas prices plummeted 18.1% after rising 1.5% during the prior month

The index for electricity, which increased 1.4% in November, was unchanged in December.

To compare how the buying power of the US dollar has changed over time, check out the updated Inflation Calculator.

The latest Labor Department monthly report reveals that the Consumer Price Index, which measures inflation pressures at the consumer level, increased 1.8% from a year ago, and rose 0.4% in November.

The November reading was inline with most analysts’ expectations, and follows a 0.3% gain in October. The cost of living for Americans increased due to several categories, but was led by 4.1% jump in energy prices — the fourth straight monthly increase. Oil prices shot up 9%. Gasoline prices notably rose as well, soaring 6.4% in November after an increase of 1.6% in the month prior.

The so-called core consumer index that excludes the more volatile food and energy items was unchanged in November, marking the first month in ten without an increase. Analysts were expecting a 0.1% increase. The core CPI rose 0.2% in October.

The annual inflation increase of 1.8% compares to the 0.2% drop in the past 12 months that was reported in October. Core inflation increased 1.7% over the past 12 months, matching the annual reading in October. The inflation figure is within the Federal Reserve’s comfort range of between 1%-2%.

Fed policy makers are scheduled to wrap up a two-day meeting later today. No significant changes in policy are expected, with interest rates likely held at 0% to 0.25%.

"I expect more of the same from today’s Fed comments. I think they’ll talk up continued low interest rates and economic healing. I don’t think expect them to change their tune," John Massey, portfolio manager at AIG Sunamerica Asset Management in Jersey City, New Jersey, said on Reuters.

Consumer price details

Rising November prices include:

• New vehicles prices rose 0.6% after a 1.6% rise in October
• Used car and truck prices climbed 2.0% compared to the 3.4% increase during the month prior
• Energy prices soared 4.1% following a 1.5% increase in October
• Gasoline prices jumped 6.4% following an increase of 1.6% from the month prior
• Fuel oil prices surged 9.0%. They rose 6.3% in October.
• Electricity costs were up 1.4% after increasing 0.6% in the two previous months
• Food prices rose 0.1%, matching October
• Airfares rose for the fifth straight month, increasing 3.8% in November
• Natural gas prices rose 1.5% following a 1.9% up tick in October
• Medical care prices climbed 0.3% in November. Prices were up 0.2% in October.
• Prescription drugs climbed by 0.2%.
• Tobacco prices advanced 1%

Declining November prices include:

• Dairy and related products declined 0.7% after increasing 1.0% in October
• Lodging away from home prices fell 1.5% after a rise of rose 0.4%
• Clothing prices declined 0.3% in November after declining 0.4% in the month prior
• Housing prices, which accounts for about a third of the CPI index, decreased 0.2% after unchanged readings from the two prior months

On Tuesday, the Labor Department released the Producer Price Index, which measures prices at the factory door and inflation pressures before they reach the consumer. The PPI showed a 1.8% surge in November. Discounting volatile food and energy prices, the core reading climbed more than expected at 0.5% — the biggest increase since October 2008. Core prices retreated 0.6% in the month prior.

To find out how the buying power of the dollar has changed over time, check out the updated US Inflation Calculator.

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.

12-Month U.S. Inflation Declines

The CPI data shows annual inflation has fallen 0.2% following a 1.3% decline in September. The annual declines are getting smaller as oil prices have risen from the almost five-year lows in December of last year.

"There will be a much more substantial jump in retail gasoline prices in November’s figures," Paul Ashworth, Toronto-based economist for Capital Economics Ltd, said on the Denver Business Journal. He said the year-over-year CPI decline is "thanks to the favorable base effects of the collapse in commodity prices last year. Over the next couple of months, however, those base effects will drop out of the equation and the annual inflation rate will whipsaw back above the core rate."

Core inflation is up 1.7% in the past year, and follows the 12- month +1.5% reading in September. The inflation figure is still within the Federal Reserve’s comfort range of between 1%-2%.

Consumer price details

Rising October prices include:

• New vehicles prices climbed 1.6% following a 0.4% rise in
  September
• Used car and truck prices rose soared 3.4% after rising 1.6% in the month prior
• Energy prices jumped 1.5% after a 0.6% increase in September
• Gasoline prices rose 1.6% following an increase of 1.0% from the month prior
• Fuel oil prices soared 6.3%. They rose 1.5% in September.
• Electricity costs were up 0.6%, the same as September
• Food prices rose 0.1% after declining 0.1%
• Airfairs rose for the fourth straight month, increasing 1.7% in October
• Lodging away from home prices rose 0.4% after a 1.5% increase
• Dairy and related products rose 1.0% in October after a 0.5% increase in September
• Natural gas prices rose 1.9% in October after declining 1.7%
• Medical care prices rose 0.2%

Declining October prices include:

• Clothing prices declined 0.4% in October after declining 0.1% in the month prior
• Meats, poultry, fish and egg prices fell 0.2% after a 1.2% decline in September
• Fruits and vegetables were down by 0.7%, following a 1.2% decline

Housing prices, which accounts for about a third of the CPI index, were unchanged for the second straight month.

On Tuesday, the Labor Department released the Producer Price Index, which measures prices at the factory door and inflation pressures before they reach the consumer. The PPI showed a 0.3% rise in October, but discounting volatile food and energy prices, the core reading declined 0.6% — the biggest drop since July 2006.

Finally, an analysis of consumer prices, the future of inflation and interest rates via MarketWatch. Michelle Girard, senior economist at RBS Securities, talks to Kelsey Hubbard about inflation trends and the economy.