US inflation eases as lower gas prices offset rent rise

A drop in petrol prices last month helped to drive US inflation to the lowest rate since July.

Prices increased at a rate of 3.2% over the 12 months to October, the Labor Department said.

That was down from 3.7% a month earlier.

Housing costs continued to climb, but overall price pressures were much milder than analysts had expected, suggesting the country's fight against inflation may nearly be over.

From September to October, the price index - which measures prices of a basket of items - was unchanged. Stripping out food and energy prices, which tend to fluctuate and mask wider trends, prices rose by 0.2%, easing from a month earlier.

The Federal Reserve has raised interest rates sharply since last year, aiming to stabilise prices that were soaring at the fastest pace in decades.

Analysts said the relatively mild price increases make the US central bank less likely to raise borrowing costs again.

"The continued moderation of inflation will help keep the Federal Reserve on the sidelines," said Greg McBride, chief financial analyst at Bankrate.com.

But he said that trouble spots remain, pointing to housing costs, which have climbed 6.7% over the last 12 months.

"The slower pace of inflation is little comfort to households still dealing with the cumulative effect of rising prices," he said. "The strain on household budgets is real with the consumer price index up more than 18% in the past three years."