Consumer prices flat in October as low gas costs hold down inflation

Reporting from Washington —  The prices Americans paid for household staples were unchanged last month as falling gasoline and energy costs kept inflation low, the Labor Department said Thursday.

The Consumer Price Index was flat in October after rising just 0.1% the previous month.

For the 12 months ending Oct. 31, prices have risen 1.7%, below the Federal Reserve’s annual target of 2%.

Economists had expected prices to fall 0.1% last month.

Prices rose modestly for food, shelter, medical care and new vehicles in October.

But those increases were offset by a sharp drop in energy prices, particularly at the gas pump.

Gas prices fell 3% in October, the fourth-straight monthly decline, the Labor Department said.

In late October, the average price for a gallon of regular unleaded fuel fell below $3 for the first time since 2010, according to AAA. Prices have continued to fall in November as well.

So-called core inflation, which excludes volatile energy and food prices, rose 0.2% in October after a 0.1% rise the previous month.

For the 12 months ending Oct. 31, core prices were up 1.8%.

The Fed uses a different inflation gauge, based on personal consumption expenditures, that has been running lower than the Consumer Price Index.

October’s data keep pressure low on Fed officials to start raising its benchmark short-term interest rate, which has been near 0% since late 2008.

At their meeting last month, Fed policymakers expected falling energy prices to hold down inflation in the short term, according to minutes released Wednesday.

Some Fed officials expressed concern that inflation might keep running below the 2% annual target “for quite some time.”

Persistently low inflation can be a problem for economic growth because it holds down wage gains, which can reduce consumer spending, economists said.

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