Consumer Prices Little Changed as Fuel Costs Decrease
The cost of living in the U.S. was little changed in October, reflecting a drop in energy prices that has yet to filter through to other goods and services.
No change in the consumer-price index followed a 0.1% gain the prior month, a Labor Department report showed in Washington. The median forecast of 84 economists surveyed by Bloomberg News called for a 0.1% drop. Excluding volatile food and fuel, the so-called core measure rose 0.2%, the most in five months.
Rising costs for rents, airline fares, hotel rooms and furniture show the slowing in overseas growth that is helping restrain fuel prices and overall inflation isn’t rippling through the economy.
“Pricing power is going to start to gradually improve for companies, but that’s going to be a slow process,” Stephen Stanley, chief economist at Amherst Pierpont Securities in Stamford, Connecticut, said before the report. “The economy has improved a lot and taken up a lot of the slack,” he said.
Estimates for consumer prices in the Bloomberg survey ranged from a 0.3% drop to a 0.1% advance.
The increase in the core gauge was the biggest since May and followed a 0.1% rise in September. Economists had forecast a 0.1% increase, according to the survey median.
Overall consumer prices rose 1.7% in the 12 months ended in October, the same as in September. The core measure increased 1.8% from October 2013 after 1.7% in the prior 12-month period.
Energy costs declined 1.9% in October from a month earlier. Gas prices have been falling for almost five months, helping cushion consumer budgets. The average price of a gallon of regular unleaded gas was $2.86 as of Nov. 18, its lowest level since November 2010, according to AAA, the largest U.S. auto club.
The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60% of the index covers prices consumers pay for services from medical visits to airline fares, movie tickets and rents.
The Labor Department’s gauge of wholesale prices, which includes 75% of all U.S. goods and services, unexpectedly climbed in October on higher costs for services, data showed earlier this week. A separate report indicated the cost of imported goods fell 1.3% in October, the biggest month-over-month decline since June 2012.
