US core CPI edges past forecasts, some economists see big rise ahead
The cost of the living in the States increased a tad more quickly than expected last month as rising prices for used cars and trucks, shelter and medical care services pushed the so-called 'core' rate higher.
Headline consumer prices increased by 0.1% month-on-month and 2.0% over the year, according to the Bureau of Labor Statistics.
At the core level, which strips out the more volatile categories, such as food and energy, prices rose by 0.2% versus September and by 1.8% in comparison to the year-ago month.
Economists had forecast an increase of 2.0% for the headline rate of inflation and of 1.7% at the core level.
Prices of used cars and trucks jumped by 0.7% on the month, alongside a 0.3% increase in those for medical care services, a 0.3% advance in shelter costs and a 0.2% rise in transportation services.
Energy prices on the other hand fell by 1.0% on the month, with a 2.3% fall in those of gasoline offsetting a 2.4% rise in fuel oil prices.
Commenting on the outlook for CPI inflation going forward, Ian Shepherdson at Pantheon Macroeconomics predicted core prices would be considerably higher in under a year's time.
"The y/y rate nudged up to 1.8% from 1.7%; it will remain close to this rate until March, the anniversary of the first of the soft numbers this year. At that point, the y/y rate will start to rise rapidly, and will be 2.5%-plus by late summer.
"The three-month annualized rate is now 2.4%, up from a low of zero in May. The "transitory" and "idiosyncratic" factors are fading."