WASHINGTON, Nov 20 (Reuters) - U.S. consumer prices were unexpectedly flat in October, but there are signs that underlying inflation pressures are starting to push higher.
The Labor Department said on Thursday falling gasoline prices, which offset rising shelter and medical costs, had restrained its Consumer Price Index last month.
The CPI had gained 0.1 percent in September and economists polled by Reuters had it slipping 0.1 percent last month. The CPI increased 1.7 percent in the 12 months through October, advanced by the same margin for a third straight month.
Stripping out food and energy prices, the so-called core CPI rose 0.2 percent last month after nudging up 0.1 percent in September. In the 12 months through October, the core CPI rose 1.8 percent after rising 1.7 percent in September.
The Federal Reserve targets 2 percent inflation and it tracks an index that is running even lower than the CPI.
Declining energy and commodity prices against the backdrop of a slowing global economy, and a strengthening dollar are keeping inflation below the U.S. central bank’s target.
Minutes of the Fed’s Oct. 28-29 meeting published on Wednesday showed most policymakers expect inflation will edge lower in the near-term and subsequently move toward its target.
But there was a bit of concern over falling market-based inflation expectations, with some officials saying they should be monitored for signs of “a possible downward shift in longer-term inflation expectations.”
The U.S. central bank has kept its short-term interest rate near zero since December 2008. Most economists expect the first interest rate increase sometime in the mid-2015.
In October, energy prices fell for a fourth straight month, with gasoline prices declining 3.0 percent after dropping 1.0 percent in September. Food prices edged up 0.1 percent after gaining 0.3 percent in September.
Within the core CPI, shelter costs increased 0.2 percent last month after increasing 0.3 percent in September.
The shelter index was up 3.0 percent in the 12 months through October. There were increases in airline fares and new motor vehicle prices as well as prices for prescription medication and hospital fees.
Tobacco prices also rose last month as did household furnishings, which posted their largest gain since November 2012. (Reporting By Lucia Mutikani; Editing by Andrea Ricci)