Annual inflation rate hit 2.6% in October

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Inflation perked up in October though pretty much in line with Wall Street expectations, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, which measures costs across a spectrum of goods and services, increased 0.2% for the month. That took the 12-month inflation rate to 2.6%, up 0.2 percentage point from September.

The readings were both in line with the Dow Jones estimates.

Excluding food and energy, the move was even more pronounced. The core CPI accelerated 0.3% for the month and was at 3.3% annually, also meeting forecasts.

Stock market futures nudged higher following the release while Treasury yields fell.

Energy costs, which had been declining in recent months, were flat in October while the food index increased 0.2%. On a year-over-year basis, energy was off 4.9% while food was up 2.1%.

Despite signs of inflation moderating elsewhere, shelter prices continued to be a major contributor to the CPI move. The shelter index, which carries about a one-third weighting in the broader index, climbed another 0.4% in October, double its September move and up 4.9% on an annual basis. The category was responsible for more than half the gain in the all-items CPI measure, according to the BLS.

Used vehicle costs also rose, up 2.7% on the month while motor vehicle insurance declined 0.1% but was still higher by 14% for the 12-month period. Airline fares jumped 3.2% while eggs tumbled 6.4% but were still 30.4% higher from a year ago.

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