ARLINGTON, Va.—Overall consumer prices rose 0.3% in October – the largest increase since January – and year-over-year growth picked up to 2.5%.
"Rising gasoline prices account for over one-third of the monthly CPI increase," noted NAFCU Chief Economist and Vice President of Research Curt Long.
"A rebound in used cars prices, which unexpectedly plunged in September, also contributed to the gains," Long added in a NAFCU Macro Data Flash report. "The food index, on the other hand, saw its largest decline since May 2016. Retaliatory tariffs imposed by China and Mexico have driven down pork and beef prices."
Data from the Bureau of Labor Statistics show that core prices (excluding food and energy costs) increased 0.2% in October compared to the previous month. Year-over-year core CPI growth remained at 2.2%. Energy prices rose 2.4% in October, rebounding from a 0.5% decrease in September. From a year ago, energy prices were up 8.8%. Food prices were decreased 0.1% in October; year-over-year growth increased 1.2%, Long said.
The Contributing Factors
"Overall, consumer prices are on the rise, and tariffs along with wage growth are contributing factors," Long said. "Given the tightness of the labor market and building inflation, the FOMC is almost certain to raise rates next month."
The Federal Open Market Committee raised rates in September to a range of 2 to 2.25%. The committee meets again Dec. 18-19.