"Employment is the dominant consideration in the Fed's policymaking process," said Neil Dutta, head of US economics at Renaissance Macro Research in New York, who sees no reason to change his call for a benchmark rate increase in June even as fuel prices have retreated. "I would frankly be skewing towards earlier, than later, rate rises."

Economists in Dutta's camp say central bankers will look past too-low price readings because a falling jobless rate is bound to push up wages, which eventually will mean companies will start charging more. Additionally, the drop in fuel costs that is keeping inflation under wraps will probably not go much further and is unlikely to extend to the majority of other goods and services.

"[By the middle of next year,] we will have seen changes in conditions that make a higher inflation forecast still plausible," said Lou Crandall, chief economist at Wrightson ICAP in New Jersey. "Part of it is that I expect a pickup in wage growth next year."

Increases in pay meant a forecast for an eventual pickup in prices remained valid, said Crandall. "I'm also guessing that the impulse from the current downturn in commodity prices will have ended, if not turned around, by then."

The drop in oil prices was primarily a function of a supply shock owing to increased production from the United States and Libya rather than diminishing demand, and was therefore less threatening to the inflation outlook, said Dutta.

Wholesale prices unexpectedly increased in October as higher costs for services and food outweighed a slump in energy, figures from the Labour Department showed. The 0.2 per cent advance in the producer price index followed a 0.1 per cent drop the previous month. Consumer prices, due today, are forecast to have declined 0.1 per cent.

There were also tentative signs that wage pressures were starting to bubble up, said Dutta.

The widely followed average hourly earnings data from the monthly job report showed a 2 per cent advance in the year to October, about where it has been since 2010. That compares with a 3.1 per cent increase in the 12 months to December 2007, as the past recession was starting.

Conversely, the Labour Department's employment cost index showed wages and salaries for civilian workers climbed 0.8 per cent in the third quarter, the most since the second quarter of 2008.

"If folks are expecting the Fed to wait for the average hourly earnings series to get up to 3 per cent, I think they're deluding themselves," said Dutta. "It's not the best measure for labour costs."

What's more, it took time for a tightening labour market to lead to a pickup in pay and then inflation, said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, who projects the Fed will start raising rates in July.

A rate increase around that time was in the cards because of "the lag between Fed policy actions and inflation rather than the real economy", said Hoffman. "If push came to shove, they'd start because the employment report was clearly getting closer to their objective," he added, particularly if other measures of slack in the labour market, including job openings, long-term unemployment and rates of hiring, were also improving.

A report last week showed that was starting to happen. Employers hired workers in September at the strongest pace since the last recession began and more people quit their jobs than at any time in more than six years, showing Americans are gaining confidence that the labour market is picking up, according to figures from the Labour Department's job openings report.

Economists at Goldman Sachs Group in New York are among those not convinced that Fed policymakers will be quick to dismiss a shortfall in their inflation goal in deciding when to increase the benchmark interest rate even as employment gains traction.

"The risks of a later lift-off have risen because the one area where the global market turmoil has shifted the outlook is inflation," Jan Hatzius, Goldman's chief economist, wrote in a research report.