Data: 3.2% YoY, 0% MoM
Forecasted: 3.3% YoY, 0.1% MoM
- Core CPI
Data: 4.0% YoY, 0.2% MoM
Forecasted: 4.1% YoY, 0.3% MoM
Inflation in the United States faltered though at a moderate pace than in previous months.
As reported by the Labor Department’s Consumer Price Index (CPI), consumer prices only increased by 3.2% year-over-year, a significant decrease from September’s CPI data which was 3.7%. But 3.0% in June of this year was the lowest since March of 2021 — so we are still above at that level.
On a monthly basis, prices in October remain unchanged at 0%, following a 0.4% rise in September, primarily due to surging pump prices. This is the lowest we have seen on this metric since we had hit a high of 1.2% in June last year and was the highest since 2005.
A significant factor in this inflation report is core inflation, which excludes the often volatile food and energy prices.
Core CPI increased 0.2% month-over-month, marking a two-year low in the annual level at 4% — but it is still above the Federal Reserve’s 2% target to tame inflation.
This is an important metric as we have not been under 4% since May of 2021, although this is the lowest level since 6.6% which was a high water mark in September of last year.
The numbers are being taken as a good sign and the Federal Reserve’s tightening cycle might come to an end as inflation slows with the financial markets reacting positively to the news.
However, Federal Reserve Chair Jerome Powell still expressed concerns about inflation not yet reaching the 2% target and putting on a hawkish stance to raise rates further if needed.
Consumer inflation expectations are still rising due to factors like gasoline prices and global geopolitical events.
While the Fed may be done with rate hikes, there is still uncertainty about how long benchmark rates will remain at their current levels, being the highest in approximately 22 years.
What we are experiencing in our own personal reality, like when we go to the store and we buy something is a little bit different from what we are seeing from the CPI data — everybody cheers as the inflation data is going down but things like housing, shelter, food and health care are still too high.
The people that are living on a small fixed income or even just everybody in general are paying for it on a monthly basis and it is very expensive as it takes up the vast majority of somebody’s income which is still going up pretty significantly.
However, things like airfare and used cars or things that not that many people buy on a regular basis are going down. But at the end of the day, it is not really pertaining to the vast majority of people.