After two months of declines, consumer prices in the United States increased in October. The cost of healthcare and other services increased, which further indicates firming inflation and supports the idea that the Federal Reserve will raise rates during its December policy meeting.
Other data released on Tuesday showed a solid increase in manufacturing, which added a further boost to the economic outlook.
The Labor Department announced its consumer price index jumped 0.2% in October, eliminating September’s 0.2% decline. Over the last 12 months, the consumer price index has inched up 0.2% after remaining unchanged in September.
A report from the Federal Reserve shows that manufacturing production jumped 0.4%, with both non-durable and long-lasting goods increasing. Medical care costs also jumped 0.7%, the biggest increase since April. The rental index also increased 0.3% after seeing a 0.4% rise in September.
Over the last 12 months (through October), the core consumer price index jumped 1.9%.
Manufacturing accounts for nearly 12% of the economy in the United States, and the sector declined in the months of August and September. A stronger dollar, inventory bloats, and spending cuts by energy firms have hurt the manufacturing sector.
A report that indicates an increase in manufacturing output is another indication that economic growth may accelerate in the fourth quarter.