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U.S. core inflation pushes higher, retail up

Staff Writer |
Underlying U.S. consumer prices increased in October on the back of a pickup in rents and healthcare costs.

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The rise in the consumer price index, excluding the volatile food and energy categories, reported by the Labor Department likely clears the way for the U.S. central bank to raise interest rates next month.

October's gain in the so-called core CPI, which measures underlying inflation pressures, could comfort Fed officials concerned that stubbornly low inflation may reflect not only temporary factors but also more persistent developments.

The core CPI rose 0.2 percent in October, also lifted by increases in the cost of used cars and trucks, tobacco, wireless phone services, airline fares, education and motor vehicle insurance. It edged up 0.1 percent in September.

October's gain lifted the year-on-year increase in the core CPI to 1.8 percent. The year-on-year core CPI had increased by 1.7 percent for five straight months.

Last month, owners' equivalent rent of primary residence climbed 0.3 percent, quickening after September's 0.2 percent increase. The cost of hospital services were up 0.5 percent and prices for doctor visits rose 0.2 percent.

Overall consumer prices, however, rose marginally in October as the boost to gasoline prices from hurricane-related disruptions to Gulf Coast oil refineries was unwound.

The CPI nudged up 0.1 percent last month after jumping 0.5 percent in September. That lowered the year-on-year increase in the CPI to 2.0 percent from 2.2 percent in September.

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