Consumer price index increases 0.2 in October
Shelter accounts for more than half of rise in CPI
CPI advances 2.6 yearonyear; base effects also a factor
Core CPI gains 0.3; up 3.3 yearonyear

WASHINGTON, Nov 13 Reuters U.S. consumer prices increased as expected in October amid higher costs for shelter such as rents, and progress towards low inflation has slowed since midyear, which could result in fewer interest rate cuts from the Federal Reserve next year.

The report from the Labor Department on Wednesday, which also showed underlying inflation continuing to run a little warmer last month did not change expectations that the U.S. central bank would deliver a third rate cut in December.

It is clear that the Fed39;s job is still unfinished, said Eugenio Aleman, chief economist at Raymond James.

The consumer price index rose 0.2 for the fourth straight month, the Labor Department39;s Bureau of Labor Statistics said. The increase was in line with economists39; expectations.

A 0.4 rise in the cost of shelter, which includes rents as well as hotel and motel rooms, accounted for more than half of the increase in the monthly CPI. Shelter costs gained 0.2 in September. Food prices, which rose 0.2 after advancing 0.4 in September, also contributed to the increase in the CPI.

Grocery store food prices edged up 0.1 amid increases in the costs of bread, dairy products as well nonalcoholic beverages and fruits and vegetables, which more than offset cheaper meats, poultry…