Current:Home > MarketsUS inflation may have picked up in October after months of easing -MacroWatch
US inflation may have picked up in October after months of easing
View
Date:2025-04-12 05:29:59
WASHINGTON (AP) — Annual inflation may have risen in October for the first time in seven months, a sign that price increases might be leveling off after steadily cooling for more than two years.
Consumer prices are thought to have increased 2.6% from 12 months earlier, according to a survey of economists by the data provider FactSet, up from 2.4% in September. Measured month to month, prices are believed to have ticked up 0.2% from September to October, the same as in the previous month.
Excluding volatile food and energy costs, so-called core prices are forecast to have risen 3.3% from a year earlier, unchanged from the previous month. From September to October, core prices are expected to have risen 0.3% for a third straight month — a pace that, if sustained, would exceed the Federal Reserve’s 2% inflation target.
An uptick in prices could fuel concerns in financial markets that progress in taming inflation might be slowing. It might make the Fed less inclined to cut its key interest rate in December and next year, as its officials have previously indicated they likely would.
Still, most economists think inflation will eventually resume its slowdown. Consumer inflation, which peaked at 9.1% in 2022, has since fallen steadily, though overall costs are still about 20% higher than they were three years ago. The price spike soured Americans on the economy and on the Biden-Harris administration’s economic stewardship and contributed to Vice President Kamala Harris’ loss in last week’s presidential election.
Yet Donald Trump’s election victory has raised considerable uncertainty about where inflation might be headed and how the Fed would react if it reaccelerated. Trump has vowed to reduce inflation, mostly by ramping up oil and gas drilling. But mainstream economists have warned that some of his proposals, notably substantially higher tariffs on U.S. imports and mass deportations of migrants, would worsen inflation if fully implemented.
Stock prices surged in the wake of Trump’s election victory, mostly out of optimism that his proposed tax cuts and deregulation would boost the economy and corporate profits. But bond yields also jumped, likely reflecting fear that inflation could stay elevated or even increase.
In addition, the economy is growing faster than many economists had expected earlier this year. It has expanded at nearly a 3% annual rate over the past six months, with consumers, particularly those with higher incomes, spending freely and fueling growth.
“Tax cuts and tariffs, among other policy proposals, have the potential to materially impact inflation, inflation expectations and economic growth,” said Seema Shah, chief global strategist at Principal Asset Management. “With uncertainties around tax and trade policies, inflationary pressures, and economic resilience, the Fed is likely to slow its rate-cutting pace.”
Higher used-car prices are thought to have raised overall inflation last month. Airfares, too, may have helped fuel inflation.
But clothing costs are believed to have declined, along with prices for groceries, gas and other energy sources.
At a news conference last week, Fed Chair Jerome Powell expressed confidence that inflation is still heading down to the central bank’s 2% target, though perhaps slowly and unevenly.
“We feel like the story is very consistent with inflation continuing to come down on a bumpy path over the next couple of years and settling around 2%,” Powell said. “One or two really good data months or bad data months aren’t going to really change the pattern at this point now that we’re this far into the process.”
Powell also noted that most sources of price pressures are cooling, suggesting that inflation isn’t likely to accelerate in the coming months. Wages are still growing and have outpaced prices for the past year and a half. But Powell noted that wages aren’t rising quickly enough to boost inflation.
A survey released Tuesday by the Federal Reserve Bank of New York found that consumers expect prices to rise just 2.9% in the next 12 months, which would be the lowest such measure in nearly four years. Lower inflation expectations are important because when consumers expect milder price increases, they’re less likely to act in ways that raise inflation, such as accelerating their purchases or demanding higher pay to offset higher prices.
Another potential source of relief for Americans’ budgets is in apartment rents. They are now barely rising on average nationwide, according to the real estate brokerage Redfin. Its measure of median rent was just 0.2% higher than it was a year ago in October, at $1,619, though that figure reflects rents only for new leases.
The government’s measurement of rents is rising faster because it includes existing rents. Many landlords are still raising monthly payments to reflect higher costs for new leases over the past three years.
veryGood! (6)
Related
- NFL Week 15 picks straight up and against spread: Bills, Lions put No. 1 seed hopes on line
- 'Station 19' Season 7: Cast, premiere date, how to watch and stream the final season
- Bill Self's contract has him atop basketball coaches pay list. What to know about deal
- 3 women and dog found dead, man fatally shot by police in North Las Vegas: Police
- Trump invites nearly all federal workers to quit now, get paid through September
- US energy industry methane emissions are triple what government thinks, study finds
- Arkansas stops offering ‘X’ as an alternative to male and female on driver’s licenses and IDs
- Riverdale’s Vanessa Morgan Breaks Silence on “Painful” Divorce From Michael Kopech
- Behind on your annual reading goal? Books under 200 pages to read before 2024 ends
- 2024 NFL free agency: Top 25 players still available
Ranking
- Appeals court scraps Nasdaq boardroom diversity rules in latest DEI setback
- Stop hackers cold: Tech tips to secure your phone's data and location
- TikTok bill passes House in bipartisan vote, moving one step closer to possible ban
- Jennifer Lopez cancels handful of shows on first tour in 5 years, fans demand explanation
- The city of Chicago is ordered to pay nearly $80M for a police chase that killed a 10
- Drake Bell alleges 'extensive' and 'brutal' sexual abuse by Nickelodeon dialogue coach Brian Peck
- Active-shooter-drill bill in California would require advance notice, ban fake gunfire
- TEA Business College team introduction and work content
Recommendation
New Mexico governor seeks funding to recycle fracking water, expand preschool, treat mental health
Boeing whistleblower John Barnett found dead in South Carolina
Neil Young returns to Spotify after 2-year hiatus following Joe Rogan controversy
Which eclipse glasses are safe? What to know about scams ahead of April 8 solar eclipse
Toyota to invest $922 million to build a new paint facility at its Kentucky complex
Both sides rest in manslaughter trial of Michigan school shooter’s dad
TikTok bill passes House in bipartisan vote, moving one step closer to possible ban
The Best Blue & Green Light Therapy Devices for Reduced Acne & Glowing Skin, According to a Dermatologist