The rate of US consumer price rises cooled in October amid lower gasoline prices and slowing increases in housing costs.
The annual rate of inflation measured by the Consumer Price Index (CPI) – which tracks the cost of a basket of goods and services – slowed to 3.2% last month, lower than the 3.7% reading in September and the coolest rate since July.
In another encouraging sign, over the month prices remained unchanged after rising by 0.4% in September. Core prices, a measure that excludes the volatile food and energy sectors, were up 4%, also a bit slower than in September.
US inflation has fallen from a 40-year high of 9.1% in June 2022. Despite the trend, and a historically low unemployment rate, the Biden administration has polled badly on its handling of the economy.
In a statement, Biden celebrated the news. “Today we saw more progress bringing down inflation while maintaining one of the strongest job markets in history,” he said. “I’m working to get results for the American people and it’s happening – and I’m not going to let up for one second.”
The latest report from the commerce department showed encouraging signs that inflationary pressures are easing. The energy index decreased 4.5% for the 12 months ending October. Prices for used cars, which shot up after the pandemic, and airline tickets also fell. Housing costs have also been a big driver of US inflation. The shelter index increased 0.3% in October, down from 0.6% the previous month.
Prices are still rising on top of already inflated figures and the annual rate of increase remains well above the Federal Reserve’s 2% target. But the latest figures will bolster views that the US central bank’s aggressive series of interest rate rises is over.
At its latest meeting earlier this month the Federal Reserve left rates unchanged but the Fed chair, Jerome Powell, said the central bank would raise rates again if it believed the downward trend in inflation was stalling.