Berliner Boersenzeitung - US consumer inflation rises in October on higher housing costs

The consumer price index (CPI) rose to 2.6 percent in October from a year ago, up from 2.4 percent in September, the Labor Department said in a statement.

This was in line with the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

"Inflation metrics for October printed pretty much as expected," economists at High Frequency Economics wrote in a note to clients. "There surely is no evidence of any crash in prices, as one might expect to see in a crashing economy."

A measure of inflation that strips out volatile food and energy costs known as "core" inflation was unchanged at 3.3 percent last month from a year earlier, underscoring the ongoing challenges the Fed faces.

"This has been a hard-fought recovery, but we are making progress for working families," White House National Economic Advisor Lael Brainard said in a statement.

"We will keep fighting to lower costs for families on key items like housing and health care, and against policies that would undermine our progress on bringing inflation down," added Brainard, who is unlikely to remain in her position once President-elect Donald Trump returns to the White House in January.

- Challenge for the Fed -

Monthly headline inflation rose by 0.2 percent, while core inflation increased by 0.3 percent. Both figures were the same as a month prior.

The housing index was responsible for more than half of the monthly rise in headline inflation, according to the Labor Department, jumping by 0.4 percent in October.

The October increase puts a slight spanner in the works of the Federal Reserve, which recently began lowering interest rates in response to easing inflation.

At the same time as inflation has cooled, the labor market has shown some signs of cooling while remaining relatively healthy, and growth has remained robust -- all good signs for the world's largest economy.

The US central bank shrugged off the economic uncertainty raised by Trump's victory in the US presidential race to cut by an additional quarter percentage-point last week.

Policymakers ignored the political drama to vote unanimously to trim interest rates by 25 basis points to between 4.50 and 4.75 percent.

Futures traders expect the Fed to keep going, penciling in a roughly 80 percent chance of another rate cut next month, according to CME Group data.

(G.Gruner--BBZ)