Topline
The government’s more steady core inflation index moderated in October to its lowest level in two years, though there’s still plenty of work to do to bring inflation down to the Federal Reserve’s goal.
Key Facts
Consumer prices rose 3.2% on an annual basis last month and flat month-over-month, according to Labor Department data released Monday morning.
That comes in just below consensus economist estimates of 3.3% annual inflation and a 0.1% monthly jump, according to FactSet.
It’s the first time since July 2022 that prices did not rise month-over-month and the lowest annual reading since this July, also coming in far below October 2022’s 7.7% annual inflation.
Thursday’s report crucially indicated further headway in the core inflation metric, which measures consumer price increases excluding the typically variable food and energy indexes and declined slightly to 4% annually.
That’s the lowest core inflation reading since September 2021.
Much of the cooldown came as energy prices declined, with gas prices down 5% monthly and annually, while more burdensome inputs like rent and monthly homeowner payments each climbed 0.5% month-over-month and nearly 7% year-over-year.
Big Number
18%. That’s how much the consumer price index, which tracks the cost of a weighted basket of goods and services for the typical American, is up since October 2020, putting inflation at about 6% annually over the last three years despite the recent cooling.
Key Background
Inflation roared to its highest point in 41 years last summer as consumers largely felt the effects of a Covid-19 related supply chain crisis and a jump in commodity prices, most crucially oil, associated with Russia’s invasion of Ukraine. In response, the Federal Reserve increased interest rates from close to zero to above 5%, broadly cooling the economy and labor market as a result.
Further Reading
CORRECTION (11/14): This story has been updated to indicate it’s the lowest core inflation reading since September 2021.
