Updated Nov 14, 2023 - Economy

Inflation pressures eased in October, Consumer Price Index shows

Data: U.S. Department of Labor; Chart: Axios Visuals

The Consumer Price Index was flat in October, helped by a drop in gasoline prices, the Labor Department said Tuesday.

Why it matters: Inflation pressures cooled last month — the freshest sign that easing is happening alongside a still-solid U.S. economy.

  • The report is especially key as Federal Reserve policymakers decide whether another interest rate increase next month is needed to help bring inflation down to its 2% target.

By the numbers: Core CPI, which excludes energy and food prices, rose 0.2% — slowing from the 0.3% gain in September.

  • Overall prices rose 3.2% in the 12 months through October, slowing from the 3.7% in September and well below the peak levels reached last year. Core CPI rose 4%, compared to 4.1% the prior month.

Details: Prices for gasoline, used cars and trucks fell outright last month, helping cool over inflation.

  • Meanwhile, shelter costs rose at a much slower pace last month — a sign that long-awaited disinflation that's been expected by economists is showing up.

The intrigue: The Fed has held off on raising interest rates at two consecutive policy meetings.

  • Officials, however, have suggested that its historic rate-hiking campaign might not be over yet. They are looking for signs that inflation is on a consistent downward path.

What they're saying: "We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes," Fed chair Jerome Powell said last week.

  • "If it becomes appropriate to tighten policy further, we will not hesitate to do so."

The bottom line: The report suggests America's inflation problem continues to ebb.

Editor's note: This story was updated with a new chart.

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