U.S. Inflation, Retail Data Show Economy Ready For Fed Rate Hike

The U.S. economy delivered a double win for the Federal Reserve in October with an encouraging pickup in inflation and an unexpected gain in retail sales, further solidifying expectations that policy makers will raise interest rates next month. The consumer-price index excluding food and fuel accelerated on an annual basis for the first time since January, while the overall cost of living rose in line with forecasts, a Labor Department report showed Wednesday. The rise in retail sales last month followed a bigger September advance than previously estimated, according to Commerce Department figures. Together, the reports are “a reflection on the fairly solid economic environment we’re currently enjoying,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. “Inflation is moving closer to the Fed’s target on the core. A December rate hike seems fairly certain, and justifiable,” and “the outlook for consumer spending looks good.” Read more at Bloomberg.