US consumer prices rose in October as the cost of shelter surged, while fuel prices fell in a boost for consumer spending power.
The Consumer Price Index increased 0.1 % last month, in line with analysts' expectations, data from the Labor Department showed.
The data still pointed to only modest inflation pressures that appear unlikely to derail the U.S. Federal Reserve's plan to keep interest rates low for an extended period.
Prices for shelter, which include rent, rose 0.3% during the month - the highest increase since 2008 - and accounted for over half of the overall increase in the CPI.
That could be a hopeful sign for the economy as landlords may feel they have more leverage to raise rents. Rents for primary residences rose 0.4%.
Fuel prices fell by 0.6% in October after climbing 7% the previous month. That was the first drop in fuel prices since June.
Higher costs at the pump have forced many American consumers to cut back on other spending.
A measure of underlying inflation was relatively muted. The core CPI, which excludes food and energy prices, increased 0.2%. In the 12 months to October overall consumer prices increased 2.2%. Core prices rose 2% in the year to October.
Superstorm Sandy pushes US jobless claims to 439,000
Superstorm Sandy drove the number of people in the US seeking unemployment benefits up to a seasonally adjusted 439,000 last week, the highest level in 18 months.
The Labor Department said today that weekly applications increased by 78,000 mostly because a large number of applications were filed in states damaged by the storm. People can claim unemployment benefits if their workplaces close and they do not get paid.
The storm has affected the claims data for the past two weeks and may distort reports for another two weeks, the department has said. The four-week average of applications, a less volatile number, increased to 383,750.
Superstorm Sandy hit the US east coast on October 29 and disrupted businesses from North Carolina to Maine. The storm also cut power to roughly 8 million homes and businesses. Some are still without power.
Before the storm distorted the figures, weekly applications had fluctuated between 360,000 and 390,000 since January.
At the same time, employers have added an average of nearly 157,000 jobs a month. That is barely enough to lower the unemployment rate, which was 7.9% in October. There are some signs that the job market is improving.
Employers added 171,000 jobs in October and hiring in August and September was stronger than first estimated. The economy has gained an average of 173,000 jobs a month since July. That is up from an average of 67,000 a month in April through June.
The unemployment rate rose slightly in October from 7.8% in the previous month because more Americans began looking for work. That suggest some felt their chances of finding a job had improved. Not all of them found jobs, which pushed up the unemployment rate.
The government only counts people as unemployed if they are actively searching for work. The economy appears to have grown faster over the summer than first thought, based on a handful of positive September reports on inventory growth and trade released this month.
Many economists now predict growth at an annual rate of roughly 3% in the July-September quarter, up from the initial estimate of 2% reported last month. The government releases its second estimate for third-quarter growth on November 29. Still, many economists say the US economy is growing in the current October-December quarter at a weak annual rate below 2%.
