U.S. Annual Inflation Rises to 1.8%; Consumer Prices in October Mark Quickest Pace in 7 Months

U.S. consumer prices in October rose the most in seven months as American paid more for a variety of items, including food, gasoline, recreation, and medical care, a government report showed Wednesday, Nov. 13.

 

On an annual basis and what has become a matching pattern since May, food prices increased while energy prices declined.

U.S. consumer prices climbed 0.4% in October after being unchanged in September, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from vegetables to vehicles.

The pace was the fastest since March. Higher energy prices accounted for more than half of the increase, the report noted.

In key pricing categories:

  • Prices at the pump jumped 3.7% for the month after falling 2.4% in September. Still, gasoline prices dropped 7.3% from a year ago. The broader index for energy, which combines items like gasoline, electricity and fuel oil, picked up 2.7% in October after falling 1.4% previously. Energy prices registered 4.2% lower year-over-year.

  • Overall prices for food in October increased 0.2% after climbing 0.1%. Food prices advanced 2.1% year-over-year, the most since the 12 months ending March 2019.

Excluding the more volatile food and energy components, so-called core consumer prices rose 0.2% in October after rising 0.1% in September.

Shelter or housing costs tamed a bit for the month with a 0.1% increase after rising 0.3% in September, while their year-over-year pace slowed to 3.3% from 3.5%. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.

"Along with the indexes for medical care and for recreation, the indexes for used cars and trucks, for shelter, and for personal care all rose in October, though the increase in the shelter index was the smallest since October 2013," the Labor Department’s monthly report stated.

Medical care rose 1%, its biggest monthly increase since August 2016, from 0.2%. Recreation advanced 0.7%, its largest increase since February 1996, from being unchanged. Used car and truck prices increased 1.3% after dropping 1.6%.

Two major pricing categories fell in October. Clothing costs declined further — 1.8% from 0.4%; and new vehicle costs slipped more — 0.2% from 0.1%.

Also, prices for airline fares and for tobacco declined in October, each falling 0.4%. In contrast, they logged respective increases in September of 0.8% and 0.6%.

In the headline annual figure, U.S. inflation in the 12 months through October rose 1.8% after increasing 1.7% for the period ending September. The 12-month inflation rate has been stuck within the range of 1.5% to 2% since the period ending December 2018. For the year so far, April’s level at 2% was the highest while February’s mark of 1.5% was the lowest as well as the weakest since September 2016.

Core inflation grew 2.3% over the last 12 months, slowing some from the prior two consecutive monthly increases of 2.4% — the quickest core rates since July 2018. This "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

"Inflation pressures remain fairly muted, and it’s certainly not going to be on the top of the Fed’s radar screen any time soon," Bloomberg News quoted Richard Moody, chief economist at Regions Financial Corp. "The broader story hasn’t changed."

The following table of key inflation figures is for the last seven months through October, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Nov. 13, 2019. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

April to October 2019 Consumer Prices – Gains & Losses in Percent

  Apr 2019 May 2019 June 2019 July 2019 Aug 2019 Sept 2019 Oct 2019 12 Month
All items 0.3 0.1 0.1 0.3 0.1 .0 0.4 1.8
  Food -0.1 0.3 .0 .0 .0 0.1 0.2 2.1
    Food at home -0.5 0.3 -0.2 -0.1 -0.2 .0 0.3 1.0
    Food away from home 0.3 0.2 0.3 0.2 0.2 0.3 0.2 3.3
  Energy 2.9 -0.6 -2.3 1.3 -1.9 -1.4 2.7 -4.2
    Energy commodities 5.4 -0.4 -3.5 2.4 -3.3 -2.3 3.5 -7.4
      Gasoline (all types) 5.7 -0.5 -3.6 2.5 -3.5 -2.4 3.7 -7.3
      Fuel oil 1.3 -0.3 -2.3 0.6 -0.9 -0.8 0.8 -10.6
    Energy services -0.1 -0.8 -0.7 .0 -0.2 -0.1 1.8 0.4
      Electricity .0 -0.8 -0.8 0.6 -0.3 .0 1.6 0.4
      Utility (piped) gas service -0.8 -1.0 -0.3 -1.8 0.1 -0.7 2.4 0.2
  All items less food, energy 0.1 0.1 0.3 0.3 0.3 0.1 0.2 2.3
    Commodities less food, energy -0.3 -0.1 0.4 0.2 0.2 -0.3 -0.1 0.3
      New vehicles 0.1 0.1 0.1 -0.2 -0.1 -0.1 -0.2 0.1
      Used cars and trucks -1.3 -1.4 1.6 0.9 1.1 -1.6 1.3 1.4
      Apparel -0.8 .0 1.1 0.4 0.2 -0.4 -1.8 -2.3
      Medical care 0.9 -0.4 -0.2 0.2 0.3 -0.6 1.2 1.0
    Services less energy 0.3 0.2 0.3 0.3 0.3 0.3 0.2 3.0
      Shelter 0.4 0.2 0.3 0.3 0.2 0.3 0.1 3.3
      Transportation 0.1 0.1 .0 0.3 0.4 0.3 0.1 0.8
      Medical care 0.2 0.5 0.4 0.5 0.9 0.4 0.9 5.1

 

The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for November and the latest annual period become public on December 11, 2019.

CPI data is used in calculating inflation rates and in this site’s U.S. inflation calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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