US consumer prices rose by a higher-than-expected 0.3% in October primarily on the back of higher petrol prices.
Most economists had expected a 0.2% rise as the nation struggles to emerge from recession.
A US consumer price index (CPI) also showed a year-over-year decline of 0.2% in a report being watched closely for signs of inflation or deflation amid the economic recovery.
The core CPI, which excludes volatile food and energy costs, is seen nevertheless as a good barometer a figure of future inflation trends.
Elsewhere, US housing starts unexpectedly slumped in October as the economy struggled to emerge from a recession sparked off by a home mortgage meltdown.
The US Commerce Department said that construction starts on privately owned homes dived 10.6% from September to an annualized 529,000, much lower than the 600,000 expected by most economists.
It was below the revised September estimate of 592,000 and 30.7% lower than the October 2008 rate of 763,000, the department said.