Consumer prices rise slightly in October

Chris Hare, economist at Investec, said: “Our firm view is that today’s (second) negative inflation outturn does not herald a persistent deflationary episode”. This is the first time this year that inflation rate was below zero for two successive months.

In contrast, transportation prices were the primary driver of the decrease in Utah’s October CPI, having declined 1.4 percent from the month before due to lower vehicle rental, airfare, and gasoline prices. Nominal wage gains have picked up, but low inflation is the biggest reason for the solid real pay gain.

Now keep in mind that the core CPI annual reading for September was also 1.9%. Core costs were up 1.9 percent, matching the September year-to-year change.

The consumer price index rose 0.2%, the Labor Department said Tuesday, in line with economists’ estimates.

The unemployment rate has improved to a healthy 5 percent, compared to 5.7 percent a year ago. The BLS separates out all energy costs and puts them together into one index.

The indexes for food, energy, and all items less food and energy all increased modestly in October.

Core inflation’s components include shelter, transportation, medical care and anything that is not food or energy.

While the core CPI figure for the year is close to the Federal Reserve’s 2.0 percent target inflation rate, the Fed focuses on another measure, the personal consumption expenditures (PCE) price index, which in September was only up 0.2 percent year-on-year.

In the 12-month period through October, the CPI was up 0.2% after being unchanged during September.

Airline fares rose 1.5 percent, ending a string of three consecutive declines.

Below is a graph of the medical commodities index, which is mostly prescription drug prices.

The cost of hospital services shot up 2 percent from September, the largest monthly increase recorded for this category.

He added that the effect of the tripling of university tuition fees, which came into effect in 2012, will finally drop out of the annual comparison in October, and could take as much as 0.2 per cent off annual inflation.

But cost pressures in the labour market are also running below the level needed for inflation to return to target, the BoE says, disputing recent ONS figures which showed unit labour costs rising at their fastest rate in two-and-a-half years.

The United States economy is becoming increasingly isolated in terms of global trade, and many enterprises rely increasingly on the domestic USA market.

Shortly after the opening bell, the Dow Jones Industrial Average gained 18.58 points, or 0.11 percent, to 17,501.59.