WASHINGTON (AP) — Prices rose last month in the United States in the latest sign that inflationary pressures that have been dominating the country may ease as the economy slows and consumers become more cautious. eased.
The consumer price index for October reached 7.7% year-on-year and 0.4% from September, the Labor Department said on Thursday. The year-on-year gain was the smallest since January. Excluding volatile food and energy prices, ‘core’ inflation has risen 6.3% over the past 12 months, up 0.3% from September.
All the numbers fell short of economists’ expectations.
Despite last month’s tentative inflation easing, the Federal Reserve is widely expected to continue raising interest rates in an attempt to stem persistently high inflation. However, many economists warn that the Fed will likely trigger a recession by next year if it continues to aggressively tighten credit.
This is breaking news. Here’s AP’s previous story:
WASHINGTON (AP) – With stagnant U.S. inflation likely to continue to weaken in October, the Federal Reserve (Fed) sees little reason to slow down by steadily raising interest rates to slow inflation.
The Labor Department will report on Thursday that consumer prices surged 8% from 12 months ago and 0.6% from September to October, according to a survey of economists by data firm Factset. Another measure called core inflation, which excludes volatile food and energy costs, is expected to surge 6.5% over the past year and 0.5% from September to October.
Like many other countries, the U.S. is struggling to keep inflation under control, and as the Fed continues to raise borrowing costs for businesses and consumers, millions of households are under pressure and the economic outlook is bleak. It is The acceleration in inflation was unleashed by a surge in consumer spending caused by shortages of goods and labor after the pandemic-induced recession, massive federal aid and food and energy cuts after Russia’s invasion of Ukraine.
So far this year, the Federal Reserve has raised its benchmark interest rate by a whopping six times, and exorbitantly high borrowing rates for mortgages, car purchases and other high costs have pushed the world’s largest economy are at greater risk of slipping into recession.
Inflation was at the top of many voters’ heads in the midterm parliamentary elections that ended Tuesday. While the Republicans failed to get the big political gains that many expected, their economic insecurity contributed to the loss of Democrats’ seats in the House of Representatives.
Even at current high levels, inflation has begun to ease on some measures and may continue to do so in the coming months. For example, most measures of workers’ wages show that large wage increases over the past 18 months have leveled off and started to decline. Workers’ wages are not the main driver of inflation, but inflationary pressures could rise further if firms offset rising labor costs by charging customers more.
Supply chain disruptions have all but cleared up, with the exception of automakers still struggling to get the computer chips they need. Shipping costs are down to pre-pandemic levels. Freighter backups off the Port of Los Angeles and Long Beach have been lifted.
Inflation should also fall due to the new rent declines revealed in real-time measurements from sources such as ApartmentList and Zillow, as they begin to be reflected in future government measurements.
The country’s job market remains resilient even though many fear the economy will plunge into recession next year. Employers are adding an average of 407,000 jobs each month, and the unemployment rate is just 3.7%, nearing a half-century low. Job openings are still at historically high levels.
However, the Fed’s interest rate hikes have severely damaged the US housing market. Average interest rates on 30-year fixed mortgages have more than doubled over the past year to over 7% before falling slightly last week. As a result, residential investment collapsed in his July-September quarter, declining at an annualized rate of 26%.
Sales are down due to rising mortgage interest rates. Home prices have slowed sharply compared to his year ago and are starting to fall month by month. Rents for new apartments are also falling.
However, due to the way the government calculates housing costs, economists believe house prices may have surged in October, boosting broader inflation indicators. The government measures the cost of all rents, including most rents on existing leases. But demand for rent on new leases is slowly declining.
Economists also expect prices of many key commodities to fall. Used car prices, which surged last year, are expected to fall through September and October as computer chip shortages have significantly reduced new car availability. The cost of wholesale used cars has steadily declined, but is still not fully reflected in retail prices.
AP Economics Writer Christopher Luger contributed to this report.
Copyright © 2022 The Washington Times, LLC.
https://www.washingtontimes.com/news/2022/nov/10/us-consumer-inflation-eased-to-77-over-past-12-mon/?utm_source=RSS_Feed&utm_medium=RSS US consumer price inflation slowed to 7.7% over the last 12 months