Wednesday's report also underscored that Americans' incomes and spending remained healthy.
Consumer price increases accelerated last month, the latest sign that inflation's steady decline over the past two years has stalled in recent months.rose 2.3% in October from a year earlier, the Commerce Department said Wednesday. That is up from just 2.1% in September, though it is still only modestly above the Fed's 2% target.
Inflation has fallen sharply since it peaked at 7% in mid-2022, according to the Fed's preferred measure. Yet yearly core inflation has fluctuated between 2.6% and 2.8% since February. Price increases have remained elevated in services, including apartment rents, restaurant meals, and car and home insurance.
Solid growth and stubborn inflation, however, may keep Federal Reserve officials from cutting their key interest rate as quickly as they had signaled at their last meeting in September. Many economists now expect they will reduce their rate by a quarter-point in December, then delay further cuts while gauging the impact of the reductions they made this year.
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