Inflation in the United States slowed last month, according to the Associated Press, in a sign that the Federal Reserve’s interest rate hikes are continuing to cool the consumer price spikes that have bedeviled consumers for the past two years.
Today’s report from the Labor Department showed that lower gas prices helped cool overall inflation, which was unchanged from September to October, down from the 0.4% jump the previous month. Compared with a year ago, consumer prices rose 3.2% in October, down from 3.7% in September.
Excluding volatile food and energy prices, so-called core prices also weakened unexpectedly. They rose just 0.2% from September to October, slightly below the pace of the previous two months. Economists closely track core prices, which are thought to provide a good sign of inflation’s future path. Measured year over year, core prices rose 4% in October, down from 4.1% in September.
The latest price figures arrive as Fed officials, led by Chair Jerome Powell, are considering whether their benchmark interest rate is high enough to quell inflation or if they need to impose another rate hike in coming months.
The costs of many services, notably rents, travel, and health care, are still rising faster than before the pandemic. Services prices typically change more slowly than the cost of goods, because they largely reflect labor costs, which aren’t directly affected by interest rates.
Many economists say a key reason why most Americans hold a gloomy view of the economy despite very low unemployment and steady hiring is that the costs of things they buy regularly — milk, meat, bread, and other groceries — remain so much higher than they were three years ago. Many of these items are still growing more expensive, though more gradually.
