Inflation is still running hot as Americans prepare for the holidays.
The October reading of the Consumer Price Index – a closely watched measure of the cost of everyday goods and service – showed an increase of 7.7% compared to the same month one year earlier. On a monthly basis, prices spiked 0.4% compared to September, according to the Bureau of Labor Statistics.
The 7.7% figure was the smallest 12-month increase for the Consumer Price Index since January — a sign the Fed’s efforts are having an effect. Core inflation, which excludes volatile food and energy prices, increased by 6.3% on an annual basis. Prices are still running well above the Fed’s 2% target level.. On a monthly basis, they predicted prices would rise 0.6% from September to October.While gas prices has fallen since hitting all-time highs earlier this year, Americans are getting crushed by major hikes in grocery store aisles and while paying their monthly rent bills.
And experts have warned energy prices could spike again as winter approaches, adding to the pressure on households.The October CPI report is considered a critical bellwether for the Fed as it attempts to address surging inflation without tipping the US economy into a severe recession. Fed policymakers have implemented a series of supercharged interest rate hikes this year – with more expected in the months ahead.
Earlier this month, Fed Chair Jerome Powell signaled the central bank could slow the pace of its rate hikes by as soon as its December meeting. At the same time, he affirmed the Fed was unlikely to pause its policy tightening efforts in the near future.“We still think there’s a need for ongoing rate increases and we have some ground left to cover here, and cover it we will,” Powell said.
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