Consumer prices edged up 0.2% last month and were 2.6% higher than they were a year ago, according to data released Wednesday by the U.S. Bureau of Labor Statistics.
The increase in the annual inflation rate in October exceeded the 2.4% rise for the 12-month period that ended in September. However, at 2.6% the annual inflation rate is still running far below its 9.1% peak in June of 2022.
During the month of October, the cost of shelter was up 0.4%, accounting for over half of the monthly all items increase. The food index also increased over the month, rising 0.2%. The energy index was unchanged over the month, after declining 1.9% in September.
When the more volatile food and energy prices are stripped out of the index, inflation rose 0.3% for the month in October, just as it did in August and September. In addition to higher shelter costs, there were increases in the cost of used cars and trucks (+2.7%); airline fares (+3.2%); medical care (+0.4%); and recreation services (+0.7%).
The indexes for apparel (-1.5%); communication (-0.6%); and household furnishings and operations (-0.1%) were among those that decreased over the month.
Viewed on an annual basis, the index for all items except food and energy increased 3.3% for the 12-month period ending in October. The energy index was down 4.9% over the same 12-month period and the food index was up 2.1%.
Expectations for a 25-basis point interest rate cut at the Federal Reserve’s Dec. 17-18 meeting increased to 82% after the October CPI data was released, according to CME FedWatch, the CME Group’s online resource tool that gives investors analysts and economists a measure of market expectations for the Fed’s future monetary policy.
U.S. stocks were mixed in early trading on Wednesday after the CPI data was released.
