Investing.com – Annualized consumer price inflation (CPI) hit a 2-year high in October, though core inflation eased, official data showed on Thursday.
In a report, the U.S. Commerce Department said that consumer prices gained 0.4% in October from a month earlier, in line with expectations and compared to a 0.3% increase in the previous month.
Year-over-year, consumer prices increased 1.6% last month, also in line with forecasts and after having risen 1.5% in September. That was its highest reading since October 2014.
Consumer prices, excluding food and energy costs, increased by a seasonally adjusted 0.1% last month, below forecasts for a 0.2% rise and compared to the 0.1% advance seen in September.
Core CPI increased at annualized rate of 2.1% in October, also below the forecast for a gain of 2.2% which had been the prior month’s increase.
Core prices are viewed by the Federal Reserve (Fed) as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Market participants may have a chance to hear Fed chair Janet Yellen’s comments on the inflation data when she responds to questions from Congress in her testimony to the Joint Economic Committee at 10:00AM ET (15:00GMT) on Thursday.
In her pre-released speech, Yellen warned of the danger of waiting "too long" to begin tightening monetary policy and said that the central bank had thought back in the November 2 meeting that it could be "appropriate" to hike rates "relatively soon".
After the report, which was published simultaneously with weekly jobless claims, the October building permits and housing starts, along with the Philly Fed survey for the month of November, EUR/USD was trading at 1.0705 from around 1.0722 ahead of the release of the data, GBP/USD was at 1.2445 from 1.2456 earlier, while USD/JPY was at 109.43 from 109.28 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.36, compared to 100.21 ahead of the report.
Meanwhile, U.S. stock futures pointed to a flat open. The Dow futures edges forward 3 points or 0.02%, the S&P 500 futures inched up 1 point, or 0.05%, while the Nasdaq 100 futures traded up 5 points, or 0.11%.
Elsewhere, in the commodities market, gold futures traded at $1,225.05 a troy ounce, compared to $1,226.85 ahead of the data, while crude oil traded at $46.16 a barrel from $46.32 earlier.