Underlying inflation pressures pushed higher in October, even as falling petrol prices kept overall US consumer prices in check.
The US Labor Department said yesterday its so-called core Consumer Price Index, which excludes food and energy, rose 0.2%, the largest increase in five months, after nudging up 0.1% in September.
In the 12 months through October, the core CPI rose 1.8% after rising 1.7% in September, a sign that a recent disinflationary trend has probably run its course.
However, falling gasoline prices, which offset rising shelter and medical costs, left the overall CPI unchanged last month after a 0.1% gain in September.
“The decline in energy prices simply hasn’t yet bled through to the core. Inflation, while below the Fed’s target, is certainly not “too low,” today’s flat headline reading furthers the debate surrounding potential Fed activity,” said Dan Greenhaus, chief strategist at BTIG in New York.
US stock index futures held their losses on the data, while US Treasury debt prices trimmed gains. The dollar rose against the euro and the yen.
Declining energy and commodity prices against the backdrop of a slowing global economy, and a strengthening dollar are keeping inflation below the Federal Reserve’s 2% target.