WASHINGTON – Rising energy costs pushed consumer prices higher in October, but overall inflation remains tame.
The Labor Department said Thursday that its consumer price index rose 0.4 percent last month, the most since April and up from a 0.3 percent increase in September. Over the past year, consumer prices are up 1.6 percent — below the Federal Reserve's 2 percent annual inflation target.
Despite low inflation, the Fed has hinted that it might resume raising U.S. interest rate at its next meeting Dec. 13-14. The Fed raised rates nearly a year ago for the first time since 2006 and was widely expected to follow up with several more hikes in 2016. But it held off as the U.S. economy stalled from late 2015 through mid-2016 and the global economy continued to look weak.
Energy prices rose 3.5 percent last month, led by a 7 percent hike in gasoline prices. The cost of shelter rose 0.4 percent on a 1.8 percent rise in hotel rates. Food prices were unchanged for the fourth straight month. Medical care prices were also flat.
Core inflation, which strips out volatile food and energy costs, rose a modest 0.1 percent last month and is up 2.1 percent over the past year.
At its last meeting in November, the Fed said a healthy job market, rising consumer spending and improved economic growth meant that the case for a rate hike has "continued to strengthen."