WASHINGTON — The October consumer price index posted a 0.1% rise, with core adding 0.2% (0.1796% unrounded).

These resulted in a 2.2% overall increase and a 2.0% core climb over the year, still modest inflation readings.

Food printed up 0.2% as dairy had its third jump in a row. Meats-fish and fruits-vegetables also rose.

Energy dropped 0.2%, reversing some of the sharp gains in August and September, led by a 0.6% slide in gasoline (off 2.1% unadjusted). Natural gas posted a 0.2% decline after months of gains, also contributing to the ease.

Electricity had its largest increase in more than a year at a 0.5% rise, though the change over the year remains negative at a 1.2% drop.

In core, Owners' Equivalent Rent at plus-0.2% and higher hotel costs boosted shelter. Apparel printed up 0.7% as women's and girls' clothing prices jumped, and airfares advanced 2.4% in a second gain. These boosted the total.

But used cars at a 0.9% decrease (a fourth drop) and new cars & trucks at a 0.1% dip (up 0.2% unadjusted), and recreation at a 0.2% drop (television prices fell) were offsets. Medical care was unchanged, the first time since July 2010 that these prices failed to rise.

Unlike the PPI, where the switchover to new 2013 auto prices affected the data, the October CPI appeared unaffected. Used car prices have been falling because demand has switched to new vehicles, and the monthly seasonal adjustment factor seemed to adequately compensate for the portion of new vehicles counted.

Overall, the CPI data were about as expected. A special statement said that "Hurricane Sandy had virtually no impact on data collection efforts or survey response rates" for October CPI.

 

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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