By Amara Omeokwe 

WASHINGTON -- Gasoline costs pushed up prices for U.S. consumer goods in October, while new tariffs on imports appeared to have little effect on what Americans paid for clothing and household furnishings.

The consumer-price index -- which measures the costs of everyday goods and services from food to dental care -- a seasonally adjusted 0.4% in October from the previous month, the Labor Department said Wednesday. Core prices, excluding often volatile food and energy categories, were up 0.2%.

The U.S. placed duties on a range of Chinese imports this fall as part of the continuing trade war -- including clothing, tools, electronics and other consumer goods. But a 1.8% drop in apparel prices helped hold down overall core inflation in October.

Consumers generally aren't shouldering the costs of those levies, said Josh Nye, senior economist at RBC. "Probably because of competitive pressures or other factors, businesses haven't been able to pass along much of the tariff price increases they're seeing [to consumers]," he said.

The consumer-price index increased 1.8% in October from a year earlier, higher than the 1.7% year-over-year increase seen in the previous two months. Core prices were up 2.3% over the year.

"The broader story remains the same: Inflation pressures remain mild, and it will be some time before inflation becomes a main concern for the [Federal Reserve]," Richard Moody, chief economist at Regions Financial Corp., said in a note to clients.

Fed Chairman Jerome Powell said in congressional testimony Wednesday that inflation pressures remained muted, and he signaled comfort with the central bank's current interest-rate stance, with its benchmark interest rate at a range between 1.5% and 1.75%.

"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely," Mr. Powell told lawmakers.

The Fed's preferred inflation gauge -- called the personal-consumption expenditures price index, a separate measure from the Commerce Department's -- -has trended lower than the consumer-price index and below the 2% rate the Fed targets. The PCE index rose 1.3% in September from a year earlier.

Energy prices, which rose 2.7% in October from the previous month, accounted for more than half the gains in the headline consumer-price index, according to the Labor Department. Gas prices increased 3.7%, helping drive the advance in the overall energy index.

Wednesday's consumer-price index report showed Americans also paid more for items such as food, used cars and medical services.

A separate Labor Department report released Wednesday showed U.S. inflation-adjusted wages declined in October, as increases in consumer prices outpaced gains in earnings. Real average hourly wages fell a seasonally adjusted 0.2% in October from September, despite an unemployment rate that is hovering near a 50-year low.

Wage gains, subdued inflation and a solid labor market have helped spur consumer spending this year, in turn helping to prop up the broader economy.

Slower wage growth could drag on consumer strength and the wider 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.

Write to Amara Omeokwe at amara.omeokwe@wsj.com

(END) Dow Jones Newswires

November 13, 2019 13:30 ET (18:30 GMT)

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