The Federal Reserve’s preferred inflation measure cooled last month, according to the Associated Press, the latest sign that price pressures are waning in the face of high interest rates and moderating economic growth.
Today’s report from the Commerce Department said prices were unchanged from September to October, down from a 0.4% rise the previous month. Compared with a year ago, prices rose 3% in October, below the 3.4% annual rate in September. It was the lowest year-over-year inflation rate in more than two-and-a-half years.
Excluding volatile food and energy costs, increases in so-called “core prices” also slowed. They rose just 0.2% from September to October, down from a 0.3% increase the previous month. Compared with 12 months ago, core prices rose 3.5%, below the 3.7% year-over-year increase in September. Economists closely track core prices, which are thought to provide a good sign of inflation’s likely future path.
With inflation easing, the Fed is expected to keep its key benchmark rate unchanged when it next meets in two weeks. The latest figures also suggest that inflation will fall short of the Fed’s own projected levels for the final three months of 2023.
Most economists say they are now confident that inflation will fall steadily to the Fed’s 2% target over the next year or so.
