Consumer price growth cooled even more than expected, according to the latest data from the Bureau of Labor Statistics.
- Y-O-Y: The Consumer Price Index for All Urban Consumers slowed to 3.2% in October, down from 3.7% in September and the lowest level since July…
- M-O-M: Consumer prices were up 0.2% in October, down from September’s 0.3% rise and the lowest increase since July.
Beat The Street. Economists thought inflation would only fall to 3.3% in October.
Food. The Food Index rose 0.3% in October, higher than the 0.2% increase in September and the highest level since February.
- Food price growth slowed to 3.3% in October, down from 3.7% in September and the lowest level since June 2021.
- Food at home slowed to 2.1% (lowest since June ’21) and food away slowed to 5.4% (lowest since Oct ’21) in October.
Energy. The Energy Index fell 2.5% in October, down from the 1.5% increase in September and the biggest drop since May.
- Energy prices are now down 4.5% when compared to the same time last year, down from the 0.5% drop in September and the biggest yearly drop since July.
- Gas prices were almost entirely the cause of the dip with prices falling 5.0% in October which pushed prices down 5.3% year-over-year.
The Core. The index for all items less food and energy rose 0.2% in October, down from the 0.3% rise in September and the smallest rise since July. Year-over-year price growth slowed to 4.0%, down from 4.1% in September and the lowest number since September 2021.
- The shelter index increased 0.3% in October, down from the 0.6% rise in September and the smallest increase since June. Shelter cost growth slowed to 6.7% year-over-year, down from 7.2% in September and the lowest level since September 2022.
- The report noted that “The shelter index was the largest factor in the monthly increase.”
Reaction:
Nick Timiraos wrote in the Wall Street Journal “The inflation report unleashed stock and bond market rallies as investors concluded the Fed was done raising rates and shifted attention to when officials might begin cutting rates.”
Jeanna Smialek in the New York Times wrote “The report provided the Federal Reserve with renewed evidence that its battle against rapid inflation is working — and likely reduced the need for further rate increases.”
Chicago Fed President Austan Goolsbee said on CNBC “Over the next couple of months, we might equal the fastest drop in inflation in the last century…So we’re making progress on the inflation rate.” Goolsbee went on to say that the “the key to progress from here on inflation is housing…”