US inflation may have increased in October: Here's what's rising in price, and what's leveling off
FILE-People shop at a supermarket in Montebello, California, on May 15, 2024. (Photo by FREDERIC J. BROWN/AFP via Getty Images)
Inflation rose in the U.S. in October based on higher rent cost, expensive used cars and flight tickets, an indication that price spikes may level off after declining in September to the lowest rate since 2021.
Consumer prices increased 2.6% from a year earlier, up from 2.4% in September, the Associated Press reported, citing the Department of Labor.
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This marked the first spike in annual inflation in seven months. The AP noted from September to October, prices jumped 0.2%, the same as the previous month.
Here's what you need to know.
What prices are rising and leveling off?
Used car prices jumped 2.7% just from September to October, after having mostly declined for months before that.
Gas prices dropped 0.9% from September to October, helping to manage overall inflation. Prices have dipped more on average in the U.S., to 3.08 a gallon on Wednesday, which is down from $3.20 in October, the AP reported citing AAA.
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Grocery prices increased 0.1% from September to October and are up only 1.1% over the past year, after food costs spiked roughly 23% over the past three years. The AP reported that egg prices continue to be unpredictable. They fell 6.4% in October, although the good is up over 30% from a year earlier.
Car dealers have revamped their auto inventory after it was drained during the COVID-19 pandemic and in some instances, dealerships offered incentives to persuade consumers Compared to 2023, average used car prices dropped 3.4%.
Apartment rents also saw a change, with Redfin noting that rents are barely increasing on average in the U.S. Median rent was only 0.2% higher than it was in October 2023, at $1,619, but this number is for rents only for new apartment leases, the AP noted.
How has inflation affected "core prices"?
"Core prices," a price index that excludes food and energy costs, increased 3.33% from a year earlier, the same as in September.
The AP noted that core prices jumped 0.3% from September to October for a third straight month. Long term, core inflation at this rate would surpass the Federal Reserve’s 2% key interest rate target.
Many of the monthly spikes in consumer prices are related to a rise in rents and housing costs. According to the AP, Wednesday’s data may keep the Federal Reserve on pace to cut its key interest rate for a third time in December.
In 2022, consumer inflation peaked at 9.1%, but since that time, it has gradually declined, despite overall prices being roughly 20% higher than it was in 2021.
According to the AP, a rise in consumer prices might make the Federal Reserve less likely to cut its key interest rate in the coming months. However, most economists believe inflation will continue its slowdown.