[11/17/15] Consumer prices in the United States increased in October after two consecutive months of declines, as the cost of health care and other services rose. The economic outlook also received a lift from other data on Tuesday showing a fairly solid increase in manufacturing output in October.
The Labor Department said on Tuesday that its Consumer Price Index increased 0.2 percent last month, reversing a 0.2 percent drop in September. In the 12 months through October, the index advanced 0.2 percent; it was unchanged in September.
Signs of stabilization in prices after a recent downturn are likely to be welcomed by Federal Reserve officials and give them some confidence that inflation will gradually move toward the central bank’s 2 percent target.
A report from the Fed showed that manufacturing production increased 0.4 percent as the output of long-lasting and nondurable goods rose. Manufacturing, which accounts for 12 percent of the American economy, declined in August and September. Manufacturers have been hobbled by a strong dollar, spending cuts by energy companies and efforts by businesses to reduce an inventory glut.
Further declines in mining output and a weather-related drop in utilities production weighed on overall industrial production last month. Still, the increase in manufacturing output was another indication that economic growth would accelerate in the fourth quarter after braking to a 1.5 percent annual rate in the July-September quarter.
“The healthy rise in manufacturing sector production is a welcome sign that the headwinds to this sector are beginning to ease,” said Millan Mulraine, deputy chief economist at TD Securities in New York. “The outlook for the industrial sector is becoming incrementally more favorable.”
In October, the so-called core C.P.I., which strips out food and energy costs, gained 0.2 percent after a similar rise the previous month. Rents and medical costs accounted for much of the increase in the core index last month. The rental index increased 0.3 percent after rising 0.4 percent in September. Medical care costs rose 0.7 percent, the largest increase since April.
In the 12 months through October, the core C.P.I. increased 1.9 percent after rising by the same margin in September.
The Fed tracks the personal consumption expenditures price index, excluding food and energy, which is running below the core C.P.I. The dollar’s 18 percent rise against the currencies of the United States’ main trading partners since June 2014 has made imports like apparel and automobiles less expensive. Inflation could get a lift next year as the weak readings from late 2014 and this year drop out of the calculation.
Energy prices, including gasoline and electricity, rose last month. While food prices rose marginally, four of the six major grocery store food group indexes increased, with cereals and bakery products posting the largest increase since August 2011.
Hospital costs increased 2 percent in October and airline fares rose 1.5 percent, ending a string of three consecutive declines.
Publisher: Reuters
Link: http://www.nytimes.com/2015/11/18/business/economy/consumer-prices-rose-in-october-government-says.html?ref=economy
