US inflation rises by 0.2 per cent in October

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The Independent Online

Inflation in America was slightly higher last month, but core consumer prices – which strip out the impact of volatile food and energy costs – rose at their slowest annual pace on record, official figures showed yesterday.

The US Labor Department's core consumer-price index was flat for a third straight month, leaving the annual gain at 0.6 per cent – the smallest since records began in 1957. Including food and energy costs, the figure rose by 0.2 per cent after edging up by 0.1 per cent in September, which was below predictions of a 0.3 per cent rise during the month.

Separately, the US Commerce Department revealed that building of new homes had declined to its lowest level in 18 months. Housing starts slumped by 11.7 per cent during October, falling to an annual rate of 519,000 units – the lowest since April 2009.

Steven Ricchiuto, an economist at Mizuho Securities, said the figures had awoken people to the "the reality that the housing industry isn't out of the woods". His view was echoed by Robert Dye, a senior economist at PNC Financial Services in Pittsburgh, who said: "Housing starts? Well, they didn't. It was an absolutely abysmal number."