Consumer price index unchanged in October
CPI increases 3.2 yearonyear
Core CPI rises 0.2; gains 4.0 yearonyear

WASHINGTON, Nov 14 Reuters U.S. consumer prices were unchanged in October as Americans paid less for gasoline, and the annual increase in underlying inflation was the smallest in two years, bolstering views that the Federal Reserve was probably done raising interest rates.

Though rents continued to rise last month, the pace of increase slowed considerably from September. The softerthanexpected inflation readings reported by the Labor Department39;s Bureau of Labor Statistics BLS on Tuesday pushed U.S. Treasury yields lower and ignited a rally on the stock market.

The Fed always wants to see more progress but it is looking like the inflation battle has rounded the corner, said Christopher Rupkey, chief economist at FWDBONDS. With any luck, the economy will miss a recession and get lower inflation too.

The unchanged reading in the consumer price index followed a 0.4 rise in September. Gasoline prices dropped 5.0, offsetting the continued increase in the cost of rental accommodation. Prices at the pump rose 2.1 in September.

Food prices gained 0.3 after climbing 0.2 in each of the prior three months. Grocery food inflation increased 0.3, driven by gains in the prices of meat, fish and eggs. Cereals and bakery products cost more, while fruit and vegetable prices were unchanged.

In the 12 months through October, the CPI climbed 3.2 after rising 3.7 in…