US consumer prices expected to edge higher in October

The Bureau of Labor Statistics' (BLS) canvass of consumer prices in October will mark the first of two updates on retail inflation ahead of the Federal Open Market Committee (FOMC) decision in December. Firmer retail energy quotes, combined with a projected acceleration in core goods and services costs, likely pushed the seasonally adjusted Consumer Price Index (CPI) 0.2% higher last month, completely erasing the modest decline recorded over the August-September span.

A projected uptick in core commodities prices, along with steady advances in non-energy services costs, is expected to have pushed the CPI excluding volatile food and energy components 0.2% higher for the third time in the last five months.

The gap between the year-to-year growth rates of the headline and core CPIs is expected to have narrowed slightly during the reference period. Overall consumer prices likely edged 0.2% above the level prevailing in October 2014, while the 12-month advance of the ex-food-and-energy measure probably held steady at 1.9%.

"A variety of alternative inflation measures suggest that their expressed 2% target will soon be within reach. We expect the FOMC to begin the monetary policy normalization process at next month's gathering", says Societe Generale.