Consumer prices in US rise more than expected

WASHINGTON • US consumer prices rebounded more than expected last month and underlying inflation picked up, which together with abating trade tensions, support the Federal Reserve's signal for no further interest rate cuts in the near term.

The Labour Department said yesterday that its consumer price index (CPI) increased 0.4 per cent last month as households paid more for energy products, healthcare, food and a range of other goods. That was the largest gain in the CPI since March and followed an unchanged reading in September.

In the 12 months to October, the CPI increased 1.8 per cent after climbing 1.7 per cent in September.

Economists polled by Reuters had forecast the CPI advancing 0.3 per cent last month and gaining 1.7 per cent on a year-on-year basis.

Excluding the volatile food and energy components, the CPI rose 0.2 per cent after edging up 0.1 per cent in September. The so-called core CPI rose as healthcare costs jumped by the most in more than three years. There were also increases in prices of used cars and trucks and recreation and rents.

In the 12 months to October, the core CPI increased 2.3 per cent after rising 2.4 per cent in September.

The United States central bank last month cut interest rates for the third time this year and signalled a pause in the easing cycle that started in July.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on November 14, 2019, with the headline Consumer prices in US rise more than expected. Subscribe