Finally, some good news on the inflation front as inflation falls more than expected in October, according to the latest data from the Bureau of Labor Statistics.
- Y-O-Y: The Consumer Price Index for All Urban Consumers fell to 7.7% in October, this is down from September’s 8.2% and is now down 3.4 percentage points from the June high.
- M-O-M: The Consumer Price Index was up 0.4% in October, this is unchanged from September.
Better Than Expected. Economists had projected a much smaller year-over-year drop to 8.0% and had projected a bigger 0.7% monthly increase.
Core Inflation. The core index also fell more than expected to 6.3% in October, this is lower than 6.6% reported in September and lower than economist projections of 6.5%.
Food. Food prices increase 0.6% for the month and are now up 10.9% year-over-year. This was the smallest monthly increase since December 2021.
- Groceries were up 0.4% for the month and are now up 12.4% year-over-year which continues to outpace food away from home which had a bigger monthly increase (0.9%) but is still up a smaller 8.6%.
Energy. After three months of declines energy prices were back up in October with 1 1.8% increase from September which puts prices up 17.6% year-over-year.
- Gasoline saw a big 4.0% monthly jump putting year-over-year prices up 17.5%
- Electricity was up 0.1%, the smallest increase since February, which puts prices up 14.1% year-over-year.
Housing. Shelter costs continued to climb with a 0.7% increase from September pushing the year-over-year increase to 8.5%. This is the highest monthly and annual increase since the inception of this metric in 1990.
BOTTOM LINE: This was good news but we have a long way to go before we are back to the 2% target rate especially with shelter costs at 8.5% and climbing.