The core inflation measure tracked by the central bank rose 0.2% in October, less than expected

A man climbs into a cooler for milk at a Walmart store in Rosemead, California on November 22, 2022.

Frederick J. Brown | AFP | Good pictures

Inflation rose roughly in line with estimates in October, sending a signal that at least price increases are likely to remain stable, the Commerce Department said on Thursday.

The core personal consumption expenditures price index, which excludes food and energy, a gauge favored by the Federal Reserve, rose 0.2% on the month, up 5% from a year ago. The monthly gain was below the Dow Jones estimate of 0.3%, while the annual gain was in line.

The gains represented a decline from September, a monthly increase of 0.5% and a year-on-year gain of 5.2%.

Including food and energy, headline PCE rose 0.3% on the month and 6% on a year-over-year basis. The monthly increase was similar to September, while the annual gain was a step down from a 6.3% pace.

The department said personal income rose 0.7% month-on-month, while spending rose 0.8%, beating estimates of 0.4%.

While the central bank takes a wide range of measures to measure inflation, it prefers the PCE index because it takes into account changes in consumer behavior, such as the substitution of less expensive goods for more expensive goods. This is different from the Consumer Price Index, which is a raw measure of changes in prices.

Policymakers consider core inflation a more reliable measure because food and energy prices tend to fluctuate more than other commodities.

In other economic news Thursday, the Labor Department reported weekly jobless claims totaled 225,000, a 16,000 decline from the previous week and below the 235,000 estimate.

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