Consumer price increases accelerated last month, according to the Associated Press, in the latest sign that inflation’s steady decline over the past two years has stalled in recent months.
According to the Federal Reserve’s preferred inflation gauge, consumer prices rose 2.3% in October from a year earlier, the Commerce Department said today. That is up from just 2.1% in September, though still only modestly above the Fed’s 2% target.
Excluding the volatile food and energy categories, however, so-called “core” prices also picked up, climbing 2.8% last month from a year earlier and up from 2.7% in September, according to the Commerce Department’s personal consumption expenditures price index. Economists closely watch core prices because they typically provide a better read on where inflation is headed.
Price increases have continued in services, including apartment rents, restaurant meals, and car and home insurance. The latest data could make the Federal Reserve less likely to cut its key rate at the next meeting in December. Next month’s inflation data, some of which will be issued a week before the meeting, may play a key role in the Fed’s decision.
Today’s report also underscored that Americans’ incomes and spending remained healthy, a key reason the economy has kept growing this year despite widespread fears of a slowdown. Incomes grew 0.6% from September to October, faster than economists had expected, while consumer spending rose by a solid 0.4% last month.
