US consumer prices rose in October in a sign that inflation may be picking up again.The figures, along with the strong employment numbers last month, increase speculation that the Federal Reserve will raise interest rates in December.
The Consumer Price Index (CPI) increased by 0.2% in October, after two months of declines.
Prices were pushed up by the rising cost of electricity and a resurgence in petrol prices.
A survey of US fund managers by Bank of America Merrill Lynch found that four-fifths of the managers surveyed expected a rate rise next month.
Leslie Preston, an economist at TD Bank said: “October’s inflation numbers are just the sort of confirmation the Fed is looking for that domestic strength is generating inflationary pressures.”
The so-called core CPI, which strips out food and energy, also rose 0.2% after a similar increase in September.
Medical costs accounted for much of the increase. Medical care prices rose 0.7%, the largest increase since April. and hospital costs increased by 2%.
Although food prices rose only 0.1%, the smallest gain since May, they edged up 0.4% in September and four out of six of the indexes compiled by the big grocery store food groups showed the largest increase since August 2011.
The biggest price falls were in clothing, shoes and new cars.
Over the entire 12 months through to October, the core CPI increased by 1.9%.