Inflation in Check; Inventories Rise

Consumer prices edged higher in October but workers’ earnings rose at a faster pace, the government said. The consumer price index, the government’s main inflation gauge, rose a scant 0.2% last month, the Labor Department said, identical to September’s increase and in line with forecasts by economists. The report was another sign that inflation remains extraordinarily subdued despite the strong economy. In the first 10 months of the year, consumer prices rose at a 1.8% annualized rate, down from 3.3% for all of 1996. Meanwhile, workers’ average weekly earnings rose 0.5% last month, and after adjusting for inflation were up 0.3%, erasing the 0.3% drop in September, the department said. In a separate report, the Commerce Department said U.S. business inventories increased in September for the ninth straight month as the end to the United Parcel Service shipping strike opened the floodgates on deliveries. Business inventories rose 0.7%, more than expected. At the retail level, inventories jumped 1.1% as sales weakened. Higher retail inventories could slow the economy soon, some experts say.