US Consumer Prices Edge Up in October

By Eric Morath and Harriet Torry Features Dow Jones Newswires

U.S. consumer prices rose only slightly in October, showing stubbornly soft inflation is persisting.

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The consumer-price index, measuring what Americans pay for everything from cakes to phone service, advanced 0.1% in October from a month earlier, the Labor Department said Wednesday.

Gasoline prices fell during October after hurricanes pushed up fuel costs in September. Food prices held flat last month.

Excluding volatile food and energy costs, so-called core prices increased 0.2%.

Economists surveyed by The Wall Street Journal expected a 0.1% gain in overall prices and a 0.2% increase in core prices.

From a year earlier, consumer prices rose 2%, the first easing of year-over-year gains since June. When excluding food and energy, prices rose 1.8% from a year earlier. That was the strongest annual gain in core prices since April.

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The data presents a mixed signal to Federal Reserve policy makers considering if the economy is prepared for third increase in the central bank's benchmark interest rate this year. The Fed's final meeting of the year will be held Dec. 12-13.

At their September meeting, Fed officials penciled in a rate increase later this year, but some policymakers have expressed concerns about persistently soft inflation.

"While I'm still holding to the view that the recent weakness largely reflects idiosyncratic noise, I'll be watching the next few inflation reports closely for signs of a pickup," Federal Reserve Bank of Atlanta President Raphael Bostic said Tuesday. He said he's inclined to support a rate increase in December.

The Fed targets a 2% annual inflation rate, as measured by the Commerce Department's personal-consumption expenditures price index. That inflation gauge has undershot the target for all but two months since early 2012.

Wednesday's report showed gasoline prices fell 2.4% last month after at 13.1% increase in September. Shelter prices advanced 0.3% in October, as did medical-care services. Prices for new cars and clothes declined in October.

The economic expansion, which began in mid-2009, is one of the longest since World War II, and U.S. employers have added jobs for a record 85 straight months. But that hasn't fully translated into accelerating inflation, in part because technology is allowing Americans to find lower-cost products and wage pressures remain largely in check.

Americans' inflation-adjusted incomes declined in October, the Labor Department said in a separate report Wednesday. Average weekly earnings, adjusted for inflation, fell 0.1% in October from a month earlier. From a year earlier, real weekly earnings are up 0.4%

The Labor Department's report on consumer prices can be found at: http://www.bls.gov/news.release/pdf/cpi.pdf

Write to Eric Morath at eric.morath@wsj.com and Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

November 15, 2017 08:46 ET (13:46 GMT)