Annual inflation in the US climbed to 0.2 per cent in October from zero per cent in September as energy prices rebounded and medical costs climbed.
Compared with September, the consumer price index – the basket of goods and services used to measure inflation – climbed 0.2 per cent, lifting the annual figure.
Energy prices rose 0.3 per cent compared with a 4.7 per cent drop in September, according to the figures released today by the Bureau of Labor Statistics (BLS).
Core inflation, which excludes the volatile food and energy components and indicates where inflation will go once one off price falls have dropped out of the annual comparison, was 1.9 per cent year-on-year in October, the same as in September.
However, core inflation increased on the month.
"Advances in the indexes for shelter and medical care were the largest contributors to the increase [in core inflation], with the indexes for personal care, airline fares, recreation, alcoholic beverages, and tobacco also rising,” the BLS said.
Economists have said that the high rate of core inflation is likely to mean that inflation will rebound quickly early next year.
"Absent a very sharp drop in oil prices, CPI inflation rates should head toward the core inflation rate over the next few months. There is nothing on the price front, in our judgement, to discourage the FOMC [committee of US rate-setters] from hiking rates in December," said economists John Ryding and Conrad DeQuadros from RDQ economics, a consultancy.