WASHINGTON — Consumer prices saw an uptick last month, indicating a possible halt in the steady decline of inflation that has been observed over the past two years.
According to the Commerce Department, as reflected in the Federal Reserve’s favored inflation index, consumer prices rose by 2.3% in October compared to the same period last year. This marks an increase from 2.1% in September, although it remains only slightly above the Fed’s target rate of 2%.
When excluding the more volatile food and energy sectors, known as “core” prices, there was also an increase, with a rise of 2.8% in the past month year-over-year, up from 2.7% in September. Economists monitor core prices closely as they are believed to provide a clearer overview of future inflation trends.
Since reaching a peak of 7% in mid-2022, inflation levels have seen a significant drop, based on the Fed’s preferred measures. However, the core inflation rate has remained stagnant at 2.8% since February. Price hikes have persisted particularly in service sectors, notably affecting rents, dining out, and insurance for vehicles and homes.
The report released on Wednesday also highlighted that American incomes and consumer spending have remained strong, contributing positively to the economy’s continued growth this year, despite widespread concerns regarding a potential slowdown. Income levels increased by 0.6% from September to October, surpassing economists’ expectations, while consumer spending also showed solid growth with a 0.4% rise last month.
