by Lei Xuan
Falling gasoline prices offset higher food and rental prices, keeping consumer prices in the U.S. flat, according to a government report issued Thursday.
The consumer price index, which measures an average price of a basket of consumer goods, everything from pork to hospital services, was unchanged in October, the U.S. Bureau of Labor Statistics said.
“Core” consumer prices, which exclude volatile food and energy prices, rose 0.2 percent in October after increasing 0.1 percent in September.
Economists had forecast overall October CPI would go down 0.1 percent and core CPI would increase 0.1 percent.
Compared with a year ago, consumer prices have increased by a modest 1.7 percent.
Energy prices dipped 1.9 percent in October, the fourth consecutive monthly decline, led by a 4 percent decrease in fuel oil prices and a 3 percent decrease in gasoline prices.
“One of the unsung heroes of the economic recovery is the U.S. energy industry,” said Phil Flynn, energy analyst at Peregrine Financial Group. “Consumers really love when gasoline prices fall, because of that you’ve really put downward pressure on prices. “
Food prices rose 0.1 percent in October, which was the smallest increase since June. Apartment rents, new cars and medical care were among those that increased, but all in a modest pace.
“Prices seem to have found a bottom, which may ease some of the worries about deflationary trends that have circulated in recent months,” wrote Mesirow Financial Chief International Economist Adolfo Laurenti in a blogpost regarding Thursday’s CPI report.
He added the current level of inflation still falls short of the Federal Reserve’s preferred target rate of 2 percent, which “suggests that central bankers will feel inclined to take their time along the path toward a normalization in interest rates.”
According to an official account published Wednesday, the members of Federal Reserve’s policy-making committee, who have kept interest rates extremely low for several years, were in no hurry to raise interest rates in view of continued sluggish inflation.