According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 2.5 % year-over-year (higher than the 2.3 % last month) – headlines say up 0.3 % month-over-month. The year-over-year core inflation (excludes energy and food) rate was also marginally declined from 2.2 % to 2.1 %, and continues to be above the target set by the Federal Reserve.
Analyst Opinion of the Consumer Price Index
Energy and used cars were the main driver for year-over-year inflation. Core inflation remains above 2.0 % year-over-year.
The market expected (from Econoday):
As a generalization – inflation accelerates as the economy heats up, while inflation rate falling could be an indicator that the economy is cooling. However, inflation does not correlate well to the economy – and cannot be used as an economic indicator.
The major influence on the CPI was energy.
An increase in the gasoline index was responsible for over one-third of the seasonally adjusted increase in the all items index; advances in the indexes for shelter, used cars and trucks, and electricity also contributed. The increases in the gasoline and electricity indexes led to a 2.4-percent rise in the energy index. The food index, in contrast, declined slightly in October. The index for all items less food and energy rose 0.2 percent in October following a 0.1-percent increase in September. Along with the indexes for shelter and for used cars and trucks, the indexes for medical care, household furnishings and operations, motor vehicle insurance, and tobacco all increased in October. The indexes for communication, new vehicles, and recreation all declined. The all items index rose 2.5 percent for the 12 months ending October, a larger increase than the 2.3-percent increase for the 12 months ending September. The index for all items less food and energy rose 2.1 percent for the 12 months ending October. The energy index increased 8.9 percent, while the food index increased more modestly, advancing 1.2 percent over the last 12 months.
