CPI Steady Despite Energy Jump; Jobless Claims More Than Expected

Retail inflationary levels for October were in line with economist forecasts, despite a sharp rise in energy costs. Consumer prices were up 0.3% over the month, due in part to a 1.4% jump in energy prices, the Labor Department reported Thursday. Food prices were up 0.3%. Net of food and energy, core CPI climbed 0.2% (CPI release). The data suggests higher oil prices haven't filtered into underlying inflationary pressures, and should serve as a comfort to Fed officials who have voiced concern about the potential inflationary impact of energy and commodity prices on the U.S. economy (WSJ, full story). On an annual basis, consumer prices are up 3.5%, while core CPI is up 2.2%, just above the unofficial 2% top end of the Fed's core inflation comfort zone, although the Fed generally gives more weight to the PCE inflation index, which currently stands at an annual 1.8% . Medical-care costs were up 0.6%; clothing prices were flat; housing was up 0.2%.

Separately, first-time jobless claims jumped an unexpected 20,000 during the past week, brining total initial claims to 339,000, the Labor Department reported (Initial Claims release). Economists were expecting just a 3,000 increase. A Labor Department spokesman noted anecdotal evidence suggesting the Hollywood writers strike may have impacted claims (MarketWatch). The four-week average of initial claims remains 330,000. Americans receiving state jobless benefits fell 7,000 to 2.57 million during the week. After an initial jump following the release, pre-market futures continued their downward movement. S&P 500 futures are down 11.25 to 1466.75, while Dow futures are off 80 to 13195 as of 8:50 ET.

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