US consumer prices climb 0.3 per cent, jobless claims up

US consumer prices rose a brisk 0.3 per cent last month, driven by the sharpest rise in energy costs in five months, while jobless claims were higher than anticipated, government reports showed.

The Consumer Price Index, the most broadly used gauge of inflation, rose at the same rate as in September, which was the steepest rise since a 0.7 jump in May, according to the Labour Department report.

But core prices, which strip out volatile energy and food costs, rose a more modest 0.2 per cent last month, also in line with expectations. Both the overall and core inflation readings were directly in line with expectations.

US government bonds were steady as the data was in line with forecasts and the dollar showed little reaction.

"It shows that there's still growth, slow growth, but still growth, and as long as inflation stays within consensus I think that it's a net positive for the market," said Marc Pado, a US market strategist at Cantor Fitzgerald in San Francisco.

So far this year, prices have climbed by a seasonally adjusted annual rate of 3.6 per cent, driven by higher food and energy costs. That compares with a 2.5 per cent gain in all of last year.

Energy costs have surged at a 12.3 per cent annual rate this year, more than four times higher than the 2.9 per cent gain in all of last year. Food prices increased at a 5.5 per cent annual rate this year, compared with a 2.1 per cent rise last year.

A separate Labour Department report showed new applications for US jobless aid rose more than expected to a seasonally adjusted 339,000 last week, and the more-reliable four-week moving average held steady at a six-month high.

Initial claims for state unemployment insurance benefits rose by 20,000 from an upwardly adjusted 319,000.