Prices Edge Up In October

Inflation inched up in October, as prices rose for consumer goods from fruits and vegetables to gasoline and baby clothes.

The seasonally adjusted Consumer Price Index climbed 0.2 percent, after remaining unchanged in September, the Labor Department said Tuesday.

Still, the inflation rate for the first 10 months of this year, at just 1.6 percent, is better than the 11-year low of 1.7 percent for all of 1997.

The small increase in October prices was expected and unlikely to blow the confidence of Fed officials if they are inclined to again cut interest rates at their meeting later Tuesday. The Fed has already slashed rates twice this fall in a bid to protect U.S. businesses from economic turmoil around the world.

Some economists, however, argue that the Fed may decide the U.S. economy doesn't need additional stimulus.

Although export sales have plummeted, causing some factories to lay off workers, unemployment remains near its lowest in a generation. And American consumers - responsible for two-thirds of the nation's economic activity - continue to spend briskly.

The economy in the third quarter of the year grew at a healthy 3.3 percent rate, and stock market investors have regained losses since a frightening market drop this summer.

Written by Alice Ann Love