Washington (AP) The most recent indication that inflation’s two-year-long steady fall has paused is the acceleration of consumer price rises last month.
The Commerce Department reported on Wednesday that consumer prices increased 2.3% in October compared to the same month last year, according to the Federal Reserve’s preferred inflation indicator. Although it is still only slightly above the Fed’s 2% target, that represents an increase from only 2.1% in September.
However, when the erratic food and energy categories are taken out of the equation, so-called core prices also increased, rising 2.8% last month compared to a year earlier and 2.7% in September. Since core prices usually give a better indication of the direction of inflation, economists keep a careful eye on them.
According to the Fed’s favored metric, inflation has dropped significantly after peaking at 7% in the middle of 2022. However, since February, annual core inflation has been stagnant at 2.8%. Service costs, such as rent for apartments, meals at restaurants, and home and auto insurance, have continued to rise.
The study released on Wednesday also emphasized that Americans’ salaries and spending stayed strong, which is a major factor in the economy’s continued growth this year in spite of widespread concerns about a recession. While consumer expenditure increased by a strong 0.4% last month, incomes expanded by 0.6% from September to October, which was quicker than economists had predicted.
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