U.S. consumer prices rose in October as higher rents and rising food costs offset a decline in gasoline prices, the government reported Thursday. The Labor Department said its consumer price index (CPI) increased 0.1 percent last month, in line with analyst expectations, following sharp gains of 0.6 percent in the previous two months. Core CPI, a measure of underlying inflation that excludes volatile energy and food costs, increased 0.2 percent in October. Over the past year, consumer prices increased 2.2 percent, just above the Federal Reserve (Fed) inflation target of 2 percent. However, the data still points to only modest inflation pressures that appear unlikely to derail the central bank's plan to keep interest rates low for an extended period. The cost of shelter, which includes rents, rose 0.3 percent in October, the most in more than four years, and accounted for more than half of the increase in the CPI. Clothes and airline fares also rose, while the prices of new and used cars fell. Food prices rose 0.2 percent, in line with economist expectations following a summer drought that damaged corn, soybeans, and other crops used in both a wide variety of foods and animal feeds. Gasoline costs fell 0.6 percent after jumping 7 percent in September. It was the first drop in gasoline prices since June. Retail gasoline prices rose sharply over the summer and into September, but have retreated since then. The average price for a gallon (3.8 liters) of gasoline was $3.44 on Wednesday, about 35 cents below October's level.
