US consumer inflation rises in October on higher housing costs

WASHINGTON: US consumer inflation edged higher last month spurred by an increase in housing costs, according to government data published Wednesday, complicating the US Federal Reserve’s plans to cut interest rates.

The consumer price index (CPI) rose to 2.6 per cent in October from a year ago, up from 2.4 per cent in September, the Labor Department said in a statement.

This was in line with the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.While Wednesday’s data release complicates the Fed’s plans to cut interest rates, it remains broadly on track to slow the rate of price increases, EY chief economist Gregory Daco told AFP.

“The truth is that fundamentals today remain disinflationary,” he said. “Consumer prudence, reduced markups, easing wage growth, strong productivity growth, those are all fundamentally disinflationary.”A measure of inflation that strips out volatile food and energy costs known as ‘core’ inflation was unchanged at 3.3 per cent last month from a year earlier, underscoring the ongoing challenges the Fed faces.

“This has been a hard-fought recovery, but we are making progress for working families,” White House National Economic Advisor Lael Brainard said in a statement.“We will keep fighting to lower costs for families on key items like housing and health care, and against policies that would undermine our progress on bringing inflation down,” added Brainard, who is unlikely to remain in her position once President-elect Donald Trump returns to the White House in January. Monthly headline inflation rose by 0.2 per cent, while core inflation increased by 0.3 per cent. Both figures were the same as a month prior.