The U.S. Bureau of Labor Statistics released its Consumer Price Index for October on Tuesday, showing a 0.4% month‑over‑month increase in overall prices. Economists had forecast a 0.3% rise, so the figure came in slightly hotter than expected.
Despite the October uptick, price growth slowed from September, when the CPI climbed 0.6%. The October increase matched the rise recorded in August, indicating a modest stabilization in the month‑to‑month trend.
Key components of the rise
Shelter costs rose 0.3% in October, accounting for more than 30% of the overall monthly increase. Energy prices rose 0.7% on a monthly basis, down from a 5.2% jump in September.
Gasoline prices have been a major driver of recent inflation. In September, gas prices jumped more than 9% from August, contributing to over half of that month’s overall price increase. A recent cooling in oil prices since the midterm elections has helped bring the national average price of a gallon of gasoline below $4, according to GasBuddy data.
Annual inflation remains high
Because the BLS did not publish a full annual CPI report for October due to the government shutdown, the most recent annual figure available is for the year ending in September, when inflation was 3.7%. That compares with 3.4% in August and remains more than a percentage point above the Federal Reserve’s 2% target.
Labor market backdrop
The inflation report arrived as the Federal Reserve weighs whether to raise interest rates again in December. A strong jobs report released the week before showed employers added 165,000 jobs in October, far exceeding the average of 48,000 jobs added each month over the prior year.
If the Fed decides to act, a December rate hike would be its second increase in four months, following a quarter‑point hike in September that was intended to cool demand and bring price growth under control. Market analysts at CME Group’s FedWatch Tool currently estimate an 82% probability of a quarter‑point hike at the December meeting.
Fed leadership’s stance
Fed Chair Kevin Warsh reiterated the central bank’s commitment to reducing inflation, stating, “It’s our responsibility to get inflation down.” Policymakers are balancing the need to curb price pressures with concerns about slowing hiring.
Overall, the October CPI data suggest that while monthly price growth has moderated, inflation remains elevated, keeping pressure on the Federal Reserve to consider further monetary tightening.
Original reporting: Brookhaven News – ABC7 New York — read the source article.
