US inflation eases in October but still near decades-high
Source: AFP
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US consumer prices cooled in October but remained at decades-high levels, according to government data released Thursday, keeping the pressure on President Joe Biden's administration as Democrats struggle to retain control of Congress.
The closely-watched report showed more evidence of rising costs, including a rebound in gasoline prices, in a year when surging inflation was at the top of voter concerns, as Americans headed to the polls in this week's midterm elections.
The consumer price index (CPI), a key measure of inflation, rose 7.7 percent from October 2021, easing from September's pace but underscoring the heightened cost of living that has squeezed many households, the Labor Department reported.
Biden welcomed the data, saying that it showed "a much-needed break in inflation at the grocery store as we head into the holidays."
But he cautioned in a statement that it will "take time to get inflation back to normal levels," with potential setbacks along the way, and vowed to keep helping households with living costs.
While the annual inflation rate was the lowest since January and down from a harsh 9.1 percent in June -- the highest in 40 years -- latest figures are unlikely to bring quick reprieve from the Federal Reserve's aggressive moves to cool the economy.
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The Russia war in Ukraine has sent food and fuel prices soaring, and the energy index surged 17.6 percent over the past 12 months, according to the data.
Excluding volatile food and energy prices, "core" CPI rose 6.3 percent in October from a year ago, slightly below the rate in September.
'Uncomfortably high'
As residents reel from soaring costs, the US central bank has moved forcefully to lower demand and bring prices down.
Source: AFP
The Fed has raised the benchmark lending rate six times this year, including four consecutive giant rate hikes, despite fears it could trigger a recession.
Fed Chair Jerome Powell last week said it was premature to consider pausing the hikes, but there is a growing chorus of voices, including some Fed officials, advocating for smaller steps in coming months.
While headline data "surprised to the downside in October," consumer prices "remain uncomfortably high," said economist Rubeela Farooqi of High Frequency Economics.
Still, the numbers will be welcome news to Fed policymakers, with prices "finally showing some response" to the steep rate hikes, she said in an analysis.
Stephen Innes, managing partner at SPI Asset Management, said the inflation data "should mean the beginning of the end... and the Fed will feel much more comfortable ramping down" its policy moves.
Prices rose 0.4 percent in October, the same as in September, while core CPI slowed to 0.3 percent, half the pace of the prior month, the data showed.
Housing costs contributed to over half of the overall monthly increase in October, while the gasoline also resumed its upward move, the Labor Department said.
The energy index rose 1.8 percent in October, following three consecutive declines, including a 4.0 percent jump in gasoline.
Source: AFP
