Hot Gasoline Prices Warm Up US Inflation In October

Sumaira FH Published November 13, 2019 | 11:49 PM

An October flare-up in US fuel prices gave consumer inflation its biggest bump in seven months but elsewhere price gains were more modest, government data showed Friday

Washington, (UrduPoint / Pakistan Point News - 13th Nov, 2019 ):An October flare-up in US fuel prices gave consumer inflation its biggest bump in seven months but elsewhere price gains were more modest, government data showed Friday.

The monthly price gains were hotter than expected, according to the latest Labor Department figures, bolstering the recent decision by the Federal Reserve to pause a recent series of interest rate cuts.

In addition to fuel, prices rose for medical care, food and recreation, but new cars, commodities and clothing became cheaper, the data showed.

The closely watched Consumer Price Index rose 0.4 percent compared to September, a notch faster than economists had expected and the biggest jump since March.

Gasoline prices rose 3.7 percent after falling for four of the prior five months. Outside the volatile food and fuel categories, the "core" index rose 0.2 percent, matching expectations.

Compared to October of last year the index rose 1.

8 percent, but core year-on-year price gains slowed to 2.3 percent, the slowest increase since July.

Hospital services, however, were up 3.5 percent compared to October of last year, the biggest gain since December.

After years in which price pressures remained bafflingly low, US central bankers have suggested a breakout in US inflation is not a prime concern.

However, Fed Chairman Jerome Powell said last month the US central bank was on hold after cutting interest rates three times in a row, giving policymakers time to assess incoming data.

Ian Shepherdson of Pantheon Macroeconomics said the October numbers were mixed but pointed to even stronger gains in November.

"We remain of the view that core CPI inflation is likely to climb gradually through the middle of next year, especially if the tariffs on consumer goods are not rolled back," he said in a note to clients.