U.S. consumer inflation surges to nearly a 31-year high

The U.S. consumer price index (CPI) surged 6.2% from a year ago in October, the largest annual gain since November 1990. On a monthly basis, the CPI increased 0.9%. The rise in consumer inflation was fueled by soaring prices for food and gasoline, though a myriad of other factors contributed to the upward price pressure. Excluding the volatile food and energy categories, so-called core prices rose 0.6% in from September to October, and 4.6% compared with a year ago. That was the largest year-over-year gain in core CPI since August 1991.

The data will reinforce the view that inflationary pressures are proving far more persistent than initially expected — a growing risk the Federal Reserve acknowledged last week when it announced its plans to begin scaling back its $120 billion asset purchase program later this month. While the Fed sets its goal using a separate measure of inflation — the Personal Consumption Expenditures index — that too has picked up sharply this year.

In the 12 months through October, the U.S. producer price index (PPI) increased 8.6% after a similar gain in September. More than 60% of the increase in the PPI was due to a 1.2% rise in the costs of goods, which followed a 1.3% jump in September. A 6.7% surge in gasoline prices accounted for a third of the rise in goods prices. Wholesale food prices dipped 0.1% as the cost of beef and veal tumbled 10.3%. Services gained 0.2% last month after a similar rise in September. An 8.9% jump in margins for automobiles and parts retailing accounted for more than 80% of the increase in services.

In the 12 months through October, the core PPI rose 6.2%. That followed a 5.9% advance in September.