Consumer prices edge higher as gasoline costs rise

Fed officials are scheduled to meet December 15-16 to discuss the possibility of raising rates.

She says that interest rates could stay low for the foreseeable future if low inflation turns out to be less cyclical than structural.

The Consumer Price Index increased 0.2 percent in October.

For the year ended October 30, overall prices were up 0.2% and core prices were up 1.9%.

Last month, petrol prices rose 0.4 per cent after falling 9 per cent in September.

Chris Hare, economist at Investec, said: “Our firm view is that today’s (second) negative inflation outturn does not herald a persistent deflationary episode”. Fed Chairwoman Janet Yellen and other officials have said stronger inflation could signal the economy is finally healthy enough to absorb higher interest rates.

The Australian dollar rose to $0.7121 from $0.7091.

British annual inflation has been stuck in a narrow range of -0.1 to +0.1 percent since February, giving a boost to the spending power of consumers just as their earnings have begun to grow more strongly too, boding well for economic growth.

“The healthy rise in manufacturing sector production is a welcome sign that the headwinds to this sector are beginning to ease”, said Millan Mulraine, deputy chief economist at TD Securities in NY. “The outlook for the industrial sector is becoming incrementally more favorable”.

Core inflation, which excludes food, energy, alcoholic beverages and tobacco, stepped up 1.1% in October from September’s 1%.

CPI has been driven down this year mostly by the collapse in world oil costs but also the effects of the supermarket price war which have resulted in deflation – a sustained period of falling prices – for shoppers at the checkout. The producer-price index, which measures the prices companies receive for goods and services, posted its 10th straight year-over-year decline and the biggest annual fall since the government started publishing the series in 2009. “On the assumption that the services trade deficit was stable in October, net capital outflows last month were only half that seen in September and the lowest since fears about China’s economy intensified with the equity market collapse in June”, Chang Liu adds.

Energy prices, including gasoline and electricity, rose last month.

The Consumer Price Index rose moderately in October and that was the case in nearly any way you sliced and diced the data. By contrast, the price of apparel, new vehicles, household furnishings and operations, and used cars and trucks all declined in October.