Inflation picking up steam
Consumer price gauge posts biggest leap in 5 months
WASHINGTON -- Consumer prices in October posted their biggest increase in five months, pinching pocketbooks at the gas pump and at the grocery store.
The latest picture of the nation's pricing climate showed that inflation is picking up now that the economy has emerged from a slow spell. That is bolstering the case for the Federal Reserve to bump up short-term interest rates for a fifth time this year when policy makers meet Dec. 14.
The government's most closely watched inflation gauge, the Consumer Price Index, rose 0.6 percent in October, compared with a 0.2 percent rise in September, the Labor Department said Wednesday. Costlier energy and food were the main culprits behind last month's acceleration.
Gasoline prices for the month soared 8.6 percent, the biggest increase in more than a year. Fresh fruit prices rose by 6.3 percent, the most in more than 20 years.
Excluding volatile energy and food prices, core prices increased by a more modest 0.2 percent in October, following a 0.3 percent rise the month before.
Other economic news added to the case for a Fed rate increase:
Industrial production shot up 0.7 percent in October, following a 0.1 percent increase in September, the Federal Reserve reported.
Housing construction jumped 6.4 percent last month to a seasonally adjusted annual rate of 2.03 million units-- the highest level this year, the Commerce Department said.
