US consumer prices rise briskly for third straight month
TLT•The US Consumer Price Index rose 0.4% in October, above economists’ 0.3% forecast, while core CPI increased 0.3% for a third consecutive month. The Labor Department did not publish year-over-year figures because last year’s government shutdown prevented collection of October price data.
1. Prices rise more than expected
The Consumer Price Index increased 0.4% in October after a 0.6% gain in September, the Labor Department said. Economists had expected a 0.3% rise. Shelter costs rose 0.3% and accounted for more than 30% of the monthly increase; food prices climbed 0.5%.
2. Core inflation stays firm
Core CPI, which excludes food and energy, rose 0.3% for the third consecutive month, above economists’ 0.2% forecast. Household furnishings and supplies prices increased 0.7%, toy prices rose 1.8%, and smartphone prices climbed a record 1.4%. Used car and truck prices fell 1.2%.
3. Rate hike expectations build
The report reinforced expectations for a Federal Reserve rate increase next month. Financial markets were pricing in an roughly 89% chance of a 25-basis-point hike, while Fed Governor Christopher Waller said the central bank should raise rates and that a stronger move may be needed. The Fed left its benchmark rate in a 3.75%-4.00% range last month.
