U.S. Consumer Prices Rose 0.4% in October
November 13 2019 - 9:00AM
Dow Jones News
By Amara Omeokwe and Harriet Torry
WASHINGTON--U.S. consumer prices rose in October, driven by
higher energy costs.
The consumer-price index-which measures what Americans pay for
everyday items ranging from clothing to dental services-rose a
seasonally adjusted 0.4% in October from the previous month, the
Labor Department said Wednesday. That exceeded the expectations of
economists surveyed by The Wall Street Journal, who forecast a 0.3%
rise.
Excluding the often volatile food and energy categories, prices
were up 0.2% in October from September, matching economists'
expectations for so-called core prices.
October's increase in prices followed muted inflation readings
in September, when the headline consumer-price index was unchanged
and core prices rose 0.1%.
Energy prices, which rose 2.7% in October from the previous
month, accounted for more than half the gains in the headline
index, according to the Labor Department.
From a year earlier, consumer prices in October increased 1.8%,
higher than the 1.7% year-over-year increase seen in the previous
two months. Core prices were up 2.3% over the year.
A separate Labor Department report released Wednesday showed
U.S. inflation-adjusted wages declined, even as the U.S.
unemployment rate hovered near a 50-year low. Wage gains, subdued
inflation and a solid labor market have helped spur consumer
spending this year, which in turn has helped prop up the broader
economy.
Federal Reserve policymakers look to inflation readings to help
gauge the economy's underlying strength and guide interest-rate
policy. The personal consumption expenditures index-a separate
measure from the Commerce Department and the Fed's preferred
inflation gauge-rose 1.3% in September from a year earlier. The Fed
targets 2% inflation as measured by the PCE index.
Fed officials have cut rates three times since July to cushion
the U.S. economy against a slowdown, but Fed Chairman Jerome Powell
last month pointed to firming, albeit muted, inflation trends when
signaling that further rate hikes are likely on hold.
"Overall, we've seen moderate growth, a strong labor market,
inflation moving up. We see the outlook is for more of the same,"
Mr. Powell said at a press conference.
Wednesday's consumer-price index report showed Americans paid
more for items such as food, used cars and medical services in
October. Energy prices were led higher by a 3.7% increase in gas
prices.
Meanwhile, the Labor Department's report on real earnings showed
inflation-adjusted, average hourly wages fell a seasonally adjusted
0.2% in October from September and were up 1.2% from October 2018.
Combined with stronger inflation, a slowing pace of wage growth
could pose roadblocks for consumer strength and the broader
economy. Household spending, for instance, was a major contributor
to a 1.9% increase in gross domestic product in the third quarter
from the previous quarter, at a seasonally adjusted annual
rate.
Another measure of inflation comes Thursday with the release of
October figures for the producer-price index, which indicates
changes in the prices businesses receive for their goods and
services.
The Labor Department's report on consumer prices can be found
at: http://www.bls.gov/news.release/pdf/cpi.pdf
(END) Dow Jones Newswires
November 13, 2019 08:45 ET (13:45 GMT)
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