MW: Consumer prices up 0.3%, led by higher energy prices
Core CPI rate rises 0.2% for October, data show
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- U.S. consumer prices rose a seasonally adjusted 0.3% in October as energy prices increased for the fifth time in six months to offset another rare decline in rents, the Labor Department reported Wednesday.
The consumer price index has fallen 0.2% in the past year.
The core CPI rate, which excludes food and energy prices in order to get a better look at underlying inflation in the economy, rose 0.2% last month, led by higher prices for cars and trucks, due in part to the unwinding of the government's "cash-for-clunkers" incentives program.
Prices for new rose 1.6%, the most in 28 years. Used-car prices also increased, up 3.4%, the most in 29 years.
The core CPI is up 1.7% in the past year. Read the full report from the government.
The CPI and the core CPI were each a tenth of a percentage point higher than the consensus forecast in a survey of economists by MarketWatch. See the MarketWatch consensus forecast and complete economic calendar.
In a separate report Wednesday, the Commerce Department said housing starts fell sharply in October after months of stability. See full story on the drop in home building.
The CPI report indicates little inflationary pressure in an economy that is still underperforming on an historical scale.
Federal Reserve officials have downplayed concerns about outright deflation in recent months, but they have said in recent days that inflation's likely to remain subdued for some time as slack in the economy constrains pricing power.
Fed Chairman Ben Bernanke said earlier this week that the economy is expected to grow too slowly to create many jobs -- or generate much inflation, for that matter. See full story on Bernanke's cautious optimism.
Over the longer term, however, the massive fiscal and monetary stimulus being pumped into the economy threatens to unleash inflation.
The government will have to be nimble to remove stimulus measures at the right time. For now, getting the economy growing again, and at a sustainable rate, is the only job that matters.
Details
In October, energy prices rose a seasonally adjusted 1.5%, including a 1.6% rise in gasoline prices. Fuel oil prices jumped 6.3%.
Still, energy prices at the retail level are down 14% in the past year.
Food prices rose 0.1% on the month, after having fallen in six of the past eight months.
