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October Inflation Update

Inflation rates eased a bit in October, according to Labor Department data released on Thursday, though they still remained stubbornly high. The Consumer Price-Index showed an inflation rate of 7.7% from November 2021 through this October. That’s a decrease of a half a point from September.



Annual Inflation Down The latest inflation report is here and it looks like pressure on prices eased slightly, though rates remained incredibly high relative to what we’ve experienced the past decade. The latest report for October is trending the right way, and some economists say this is a hopeful sign that inflation has peaked – though many have been saying that for months now. Remember: The “core inflation rate” sets aside gas and groceries and measures price increases for everything else. It’s typically not a very accurate measure of how inflation impacts people day-to-day though, because food and fuel are staples for most people. But… economists think the core rate is a better predictor of long-term trends, which is why they use it to gauge the state of the economy. The core inflation rate slowed a bit in October. Over the course of 12 months, core inflation rose 6.3% in October, a slight decrease of .3 points from the month before. The important thing for economists though is that the rate of inflation curved down. From August to September, the core inflation rate jumped .6%. For the annual core inflation rate to fall from September’s CPI report to October’s is a hopeful sign. When can Americans expect to actually see prices stabilize? Unfortunately, there isn’t a good answer to when prices will finally start to fall – or atleast stabilize. Regardless of whether inflation continues to fall in the future, budgets are going to be tight in the short term. Inflation is still hot, so people can expect prices to continue to jump higher in the coming weeks and months. The increments between those price jumps may be slowing down though. And…It’s also very possible that inflation stays high for a while longer. There are certainly plenty of factors that could keep pushing prices higher, especially in the next few months as winter sets in and the demand for energy spikes. The White House celebrated the CPI report. President Biden said he expects Americans to see headway on inflation in the next few months: “It’s going to take time to get inflation down to normal levels. We can see setbacks along the way, I realize that. But we are laser focused on it. That’s why it’s so critical for us to pass important legislation this year to lower those costs for families. I know it’s going to take time to implement our entire economic agenda, which we already passed and for folks to feel it in their day-to-day lives. But I think folks are going to see it in the next few months.” Stocks surged on the news, with the biggest one day rally since 2020. The S&P rose about 5 percent and the Dow Jones Industrial average climbed 1,200 points, with traders hoping the news means the Fed will ease up on their monetary tightening. Dallas Fed President Lorie Logan said the fresh CPI data "were a welcome relief, but there is still a long way to go" to curb inflation.