After months of record high inflation, a slow down could be heading this way.
- U.S. inflation for October was down below forecasts giving hope of an inflation slowdown.
- Not only are overall prices down, but gas prices have also fallen and home and rent prices have also followed suit.
- The consumer price index (CPI) was up 7.7% from the year before, the smallest annual advance since the start of the year and down from 8.2% in September, according to a Labor Department report.
Why it’s news
The U.S. has been suffering from the highest inflation rates in the last four decades. Soaring high prices have cornered many Americans into dipping into savings and even working second jobs.
Inflation was down below forecasts last month giving a shimmering light of hope that inflation is on the way to cooling off in the coming months.
Inflation overall was high for October, but the monthly pace of “core” inflation that excludes volatile food and energy costs dropped by half, to 0.3% in October from 0.6% the month before, according to Reuters writers Ann Saphir and Howard Schneider.
The report of the drop in inflation was a good boost to the stock market as prices went soaring. The S&P 500 went up 4% after the announcement and doesn’t look to be slowing.
This news is also good for the Fed as it begins slowing rate hikes amid this inflation cool off, but many said the fight is not yet over.
“This morning’s CPI data were a welcome relief, but there is still a long way to go,” says Dallas Fed President Lorie Logan. “While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy.”