US Inflation Rises 2.5%, Consumer Prices in October Log Biggest Jump in 9 Months

Inflation in the United States quickened in October and from a year ago, according to government data released Wednesday, Nov. 14, 2018,

Annual increases in consumer prices resulted largely from higher energy prices. Consumer inflation gains in October, the biggest in nine months, were led by higher costs for gasoline and shelter, along with used cars and trucks. Overall food prices fell for the month, however.

Consumer prices increased 0.3% in October after rising 0.1% in September, the Labor Department said in its monthly report on the Consumer Price Index. The CPI is a broad measure of what Americans pay for everything from tomatoes to transportation. The positive gain marks a seventh straight and the largest since January.

"An increase in the gasoline index was responsible for over one-third of the seasonally adjusted increase in the all items index; advances in the indexes for shelter, used cars and trucks, and electricity also contributed," the report noted.

In key pricing categories:

  • Prices at the pump jumped 3% last month after sliding 0.2% previously. Gasoline prices increased 16.1% from October 2017. The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 2.4% in October after falling 0.5% in September. The Labor Department’s report shows energy prices surged 8.9% year-over-year compared to 4.8% previously.

  • Overall food prices declined 0.1% in October after registering flat in September. Food prices rose 1.2% over the last 12 months, snapping a streak of four straight increases of 1.4%.

Excluding the more volatile food and energy components, so-called core consumer prices in October rose 0.2% following their increase of 0.1% in September.

Shelter or housing costs rose 0.2% to match the previous month. The index ran at a pace of 3.2% year-over-year. 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.

In the headline figure, U.S. inflation increased 2.5% for the 12 months ending October, picking up from the previously reported annual inflation rate of 2.3%. The level reached as high as 2.9% in both June and July, the biggest gains since February 2012.

Core inflation rose 2.1% from a year earlier — down a bit from 2.2% increase for the 12-month period ending September.

July remains the standout month this year so far with its 2.4% increase, the quickest core inflation rate since September 2008. Until March, the 12-month rate had held at either 1.7% or 1.8% for 10 straight months. The core annual reading 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.

"These are pretty steady inflation prints," with "nothing in here that argues inflation is going to overshoot," Bloomberg News quoted Omair Sharif, senior U.S. economist at Societe Generale. Also, there’s little to concern policy makers, so they’ll "continue to stay gradual" with interest-rate hikes, he said.

The following table of key inflation figures is for the last nine months through October, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on November 11, 2018. 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 2018 Consumer Prices – Gains & Losses in Percent

  Apr 2018 May 2018 June 2018 July 2018 Aug 2018 Sept 2018 Oct 2018 12 Month
All items 0.2 0.2 0.1 0.2 0.2 0.1 0.3 2.5
  Food 0.3 .0 0.2 0.1 0.1 .0 -0.1 1.2
    Food at home 0.3 -0.2 0.2 0.2 .0 -0.1 -0.2 0.1
    Food away from home 0.2 0.3 0.2 0.1 0.2 0.2 0.1 2.5
  Energy 1.4 0.9 -0.3 -0.5 1.9 -0.5 2.4 8.9
    Energy commodities 3.0 1.6 0.6 -0.6 3.0 -0.2 2.9 16.3
      Gasoline (all types) 3.0 1.7 0.5 -0.6 3.0 -0.2 3.0 16.1
      Fuel oil 2.7 -0.7 2.9 1.2 2.2 0.3 3.7 26.2
    Energy services -0.5 -0.1 -1.5 -0.4 0.4 -0.8 1.7 0.1
      Electricity -0.6 0.1 -1.4 -0.4 0.3 -0.5 2.3 0.7
      Utility (piped) gas service -0.4 -0.6 -1.7 -0.5 0.9 -1.7 -0.6 -2.1
  All items less food, energy 0.1 0.2 0.2 0.2 0.1 0.1 0.2 2.1
    Commodities less food, energy -0.1 -0.1 .0 0.1 -0.3 -0.3 0.3 -0.1
      New vehicles -0.5 0.3 0.4 0.3 .0 -0.1 -0.2 0.5
      Used cars and trucks -1.6 -0.9 0.7 1.3 0.4 -3.0 2.6 0.4
      Apparel 0.3 .0 -0.9 -0.3 -1.6 0.9 0.1 -0.4
      Medical care -0.2 1.3 0.2 -1.1 -0.3 -0.1 -0.1 0.7
    Services less energy 0.2 0.3 0.2 0.3 0.2 0.2 0.2 2.9
      Shelter 0.3 0.3 0.1 0.3 0.3 0.2 0.2 3.2
      Transportation -0.4 .0 0.2 0.5 0.3 0.5 0.1 3.8
      Medical care 0.2 -0.1 0.5 0.1 -0.2 0.2 0.2 1.9

 

The BLS usually releases inflation data around the middle of every 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 12, 2018.

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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