Metro area consumer prices up sharply in October

Consumer prices in the metropolitan area rose sharply in October compared with a year ago on a spike in residential rents.

The federal Bureau of Labor Statistics reported Tuesday that its consumer price index for the 31-county region that includes Long Island climbed 0.4 percent last month compared with October 2014. That's the largest year-over-year increase in nearly a year, said Martin Kohli, the bureau's chief regional economist.

Still, price gains, year over year, have remained below 1 percent since October 2014, when they were up 1.3 percent.

Last month, residential rents increased 3.7 percent compared with a year earlier. Kohli said it was the largest such gain since June 2009.

The cost of medical care was up 3.2 percent, year over year. Grocery prices rose 1.4 percent.

These increases were offset somewhat by steep declines in the cost of energy.

Gasoline prices fell 31.9 percent in October, year over year, while natural gas and electricity were down 8.6 percent and 5 percent, respectively.

Nationwide, the price index rose 0.2 percent in October compared with a year ago, on the higher costs of automobile insurance, residential rents and tobacco products. Car insurance was up 4.7 percent, year over year. Rents rose 3.7 percent and cigarettes and other tobacco items climbed 3.4 percent.

The cost of energy continued to decline in the United States. Gasoline prices fell 27.8 percent in October compared with a year earlier and natural gas was down 11 percent.

Some economists said the price index report would cause the Federal Reserve System to postpone raising short-term interest rates after keeping them near zero percent since 2008.

The rate-setting Federal Open Market Committee meets again in mid-December. It has said inflation would be ideally around 2 percent before it raises interest rates.

"The latest round of inflation reports does nothing to reinforce the committee's confidence that inflation will reverse course and head back towards the longer-term objective [of 2 percent] anytime soon," said Lindsey M. Piegza, chief economist at the Stifel Nicolaus & Co. stock brokerage in St. Louis.