Filed under: Economic data, Headline news, Federal Reserve
October consumer prices rose 0.3% the, lead by higher fuel costs, the U.S. Labor Department announced Thursday. CPI came in in-line with the consensus estimate.
Meanwhile, core CPI, which excludes food and energy costs, rose 0.2%, also in-line with the consensus estimate.
For the first 10 months of 2007, prices have risen at a 3.6% rate, compared with a 2.4% rise the first 10 months of 2006. Core prices were up 2.3% for the same period, compared with 2.8% int the same period in 2006.
Energy prices are a major factor in CPI’s rise, the Labor Department indicated, rising 1.4% in October and more than 50% for the year. Food prices rose 0.3%.
Economic Analysis: The October CPI stat shows an inflation rate above the U.S. Federal Reserve’s inflation “comfort zone” and makes it harder for the Fed to implement a monetary easing policy aimed at stimulating the U.S. economy. Fed Chairman Ben Bernanke has stated that high commodity prices and a weak dollar will boost inflation for the immediate period, but should moderate in the quarters ahead. Still, despite Thursday’s inflation statistic, most market participants believe the Fed will maintain its current easing policy and will lower benchmark interest rates by a quarter point at next month’s meeting.
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