Consumer Prices Rise 0.3% in October

The prices paid by U.S. consumers rose just 0.3% in October, led by increases in energy costs, the Labor Department reported Tuesday.

The rise in consumer prices, which are a closely monitored gauge of inflation, was not sharp enough to raise the specter of inflation for many economists, Bloomberg reported.

The “core” consumer price index, which discounts food and energy costs, only rose 0.2% during the month.

Economists told Bloomberg that the economy is currently in a “sweet spot,” where inflationary pressure is in check, but there isn’t yet a strong risk of deflation – leaving room for the Federal Reserve to cut interest rates.

In another government report, the Commerce Department said that the United States narrowed its trade gap to $38 billion as imports declined more than exports in September.

A slowing U.S. economy and the closure of West Coast ports contributed to the decline in imports, analysts told Bloomberg.

Economists had expected the gap to narrow to $37.5 billion from a previously reported gap of $38.5 billion in August.

For the full year, the CPI is growing at a 2.7% annual rate, up from the 2.1% pace the index set last year through October.

Energy costs, including motor fuels like diesel and gasoline, rose 0.7% overall in September. Gasoline prices rose 3.8% in the month and are up 33.3% year-to-date.