The slowdown in inflation continues as gasoline prices retreated in October, but economists are warning that price pressures remain, and it may take some time for them to return to pre-pandemic levels.
According to the U.S. Bureau of Labor Statistics, the consumer price index in October increased 3.2% from 12 months earlier, down from 3.7% in September. This is a significant improvement from the pandemic-era peak of 9.1% in June 2022, the highest rate since November 1981.
Gasoline prices fell by 5% in October, leading to an overall decrease in the CPI. In addition, the core CPI fell to 4% in October, the smallest 12-month change since September 2021.
Housing inflation also declined in October, from a peak of over 8% in March 2023. However, food inflation saw a slight increase in October, with grocery prices rising 0.3% on a monthly basis.
The global imbalance between supply and demand has been driving inflationary pressures, but economists believe that these pressures are easing, with supply chains returning to normal and the labor market cooling down.
While the Federal Reserve has raised interest rates to slow the economy, Fed officials don’t expect inflation to return to the 2% target until 2026.
Overall, the data suggests a positive trend in moderating inflation, but economists remain cautious as price pressures continue to linger.
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