WASHINGTON (AFP) - US consumer prices surged 0.6 percent in October, the Labor Department said, with higher energy costs fuelling fears of renewed inflation.
But industrial production also rose 0.7 percent in October compared to September, according to the Federal Reserve, in a new sign of economic strength.
With oil prices spiralling higher at the time, a 4.2 percent rise in energy costs in October accounted for more than half of the overall rise in consumer prices, said the Labor Department`s monthly report.
The department said that over the past 12 months, consumer prices have risen 3.2 percent.
Economists had expected a 0.4 percent rise in the Consumer Price Index and the new figures will boost inflation fears after the announcement on Tuesday that producer prices in October rose 1.7 percent, the largest rise since January 1990.
Excluding food and energy prices, the CPI base index rose 0.2 percent, a slowdown from 0.3 percent in September but still higher than the 0.1 percent gain expected by Wall Street.
Within the energy index, oil product prices rose 8.5 percent in October, taking the annual hike to 15.2 percent. Heating fuel costs rose 9.4 percent, natural gas rose 0.6 percent but the price of electricity fell 1.6 percent.
The price of heating fuel has now risen 42.6 percent over the past 12 months while petrol for cars has gone up 26.6 percent.
The rise in gasoline was the main cause of the 2.3 percent rise in the transport price index, according to the Labor Department.
Airplane tickets rose 1.4 percent and the price of new cars rose 0.4 percent.
The food price index rose 0.6 percent in October -- with fresh vegetables up 8.8 percent and fresh fruit 6.3 percent higher. But the cost of meat and milk products fell slightly (0.2 percent).
The industrial production figures suprised analysts who had expected a 0.4 percent rise for October.
The US central bank said the rise was partly because of reconstruction in Florida after a series of major hurricanes.
There was a 0.1 percent rise in September and industrial production has risen 5.2 percent since October 2003.
11/17/2004 - 18:52 GMT - AFP