October Consumer Prices Rose 0.4 Percent, Beating Forecasts, With Core Up 0.3 Percent
U.S. consumer prices rose 0.4 percent in October from a month earlier, topping the 0.3 percent forecast. Core prices also rose 0.3 percent, above the 0.2 percent forecast. The Bureau of Labor Statistics released the figures at 8:30 a.m. on Nov. 10.
The pace of increase slowed from September, when consumer prices rose 0.6 percent from a month earlier. Core prices rose 0.3 percent in August, September and October alike. Core prices exclude food and energy, whose prices swing widely. That makes three straight months at the same pace.
This release carries no year-over-year rate. The Bureau of Labor Statistics could not survey prices in October of last year because of the federal government shutdown. There is no base for calculating an annual figure.
Shelter led the increase. Shelter rose 0.3 percent in October and accounted for more than 30 percent of the monthly rise. Food rose 0.5 percent and energy rose 0.7 percent. The energy increase was sharply smaller than September’s 5.2 percent. Recreation rose 0.8 percent, auto insurance 0.7 percent, hospital services 0.8 percent and transportation services 0.8 percent.
These figures are the last inflation reading the Federal Reserve will receive before its Dec. 8 and 9 meeting. The Federal Reserve raised its benchmark rate in September and then held it at a range of 3.75 percent to 4.00 percent on Oct. 28. Before the release, markets put the chance of a December rate hike at around 80 percent.
Federal Reserve Governor Christopher Waller said before the release that he would back at least a quarter-point hike in December. He also said a half-point hike should be considered if core prices rose 0.3 percent or more. Core prices rose exactly 0.3 percent. It must be made clear that Waller’s remarks came before the release. The Federal Reserve has not decided on the size of any hike.
The next consumer price index comes out on Dec. 10, the day after the Federal Reserve’s December meeting ends. The October figures will be the last inflation reading the December meeting takes into account.
