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U.S. Consumer Prices Fall 0.1% in October on Energy Costs

U.S. Consumer Prices Fall 0.1% in October on Energy Costs
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Τετ, 20 Νοεμβρίου 2013 - 18:12
U.S. consumer prices fell slightly in October, the latest soft inflation figure that could weigh on Federal Reserve officials as they consider scaling back their bond-buying program.
U.S. consumer prices fell slightly in October, the latest soft inflation figure that could weigh on Federal Reserve officials as they consider scaling back their bond-buying program.

The consumer-price index, which measures how much Americans pay for everything from furniture to medical care to housing, fell 0.1% from September, the Labor Department said Wednesday. That was the first drop since April. Core prices, which exclude volatile food and energy costs, increased 0.1%.

Compared with a year ago, overall consumer prices were up 1.0%, the smallest 12-month increase since October 2009. Core prices rose 1.7% on the year. Those figures are below the Fed's annual inflation target of 2%.

Economists surveyed by Dow Jones predicted the index would be unchanged from September and the core figure would rise 0.1%.

Last month, the overall decrease reflected gasoline prices, which were down 2.9% for the month. A boom in domestic oil drilling, abundant supplies, declining seasonal demand and lower crude-oil prices are keeping costs down.

If Americans are paying less for gas, it could encourage stronger discretionary spending for the holidays this year. Also Wednesday, the Commerce Department said retail sales for October rose 0.4%, largely on stronger auto purchases, ahead of the critical shopping season.

Outside of fuel costs, the Labor Department said consumers paid more for airline fares, recreation and used cars and trucks. Food and shelters costs both rose by 0.1%.

Still, there were some declines. Americans paid less for new vehicles, apparel and medical care services.

The central bank is watching those measures carefully as it weighs when to scale back its bond-buying program, which is aimed at driving down interest rates and in turn spurring spending, hiring and growth. The central bank decided to keep the program intact at its policy meeting last month, and details of those discussions will be released later Wednesday. It will meet again in mid-December.

In a separate Labor Department release Wednesday, Americans' real average weekly earnings rose 0.1% in October from the prior month.

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