US consumer price increases accelerated last month, driven by resilient inflation pressures. According to the Federal Reserve’s preferred inflation gauge, prices rose 2.3% from a year earlier in October, up from 2.1% in September.
Excluding volatile food and energy categories, core prices increased 2.8%, higher than the 2.7% rise seen in September. This increase is closely watched by economists as it provides insight into where inflation is headed.
Inflation has fallen sharply since its peak at 7% in mid-2022, but yearly core inflation has fluctuated between 2.6% and 2.8% since February. The elevated reading may make the Federal Reserve less likely to cut interest rates at its next meeting in December.
Some economists expect the Fed to reduce rates by a quarter-point in December, while others believe the rate will remain unchanged due to the ongoing inflation pressures.
Last month’s price increases were influenced by higher grocery prices, but gas costs fell, providing some relief to household budgets. Used car and truck prices rose 2.8%, air fares jumped 1.5%, and hotel room prices increased 0.5%. Restaurant prices also saw a modest increase of 0.3%.
The data underscores Americans’ continued healthy incomes and spending, which has driven economic growth despite fears of a slowdown. However, President-elect Donald Trump’s proposals could impact the Fed’s decision on interest rate cuts.
Source: https://apnews.com/article/inflation-federal-reserve-economy-3f7af74b5e5f814593999f3786dae949