Inflation eases in October as prices rise 7.7% from a year ago

Consumer prices across the US slowed their upward march last month, raising hopes that 40 years of fierce inflation could ease.

The consumer price index rose 7.7% in the 12 months ending October, the Labor Department said on Thursday – the lowest rate of inflation since January and a smaller increase than economists had expected. Core prices, which do not include volatile food and energy costs, rose 6.3%.

Rising prices for shelter, auto insurance, new vehicles and personal care were offset by declining prices for airline fares, apparel, used cars and trucks, and medical care.

Like other countries, the US is struggling to control inflation, which is straining millions of households and dampening the outlook for the economy as the Federal Reserve keeps raising borrowing costs for businesses and consumers.

Inflation was top of mind for many voters mid term election It ended Tuesday, with economic concerns contributing to the loss of Democratic seats in the House of Representatives, though Republicans failed to reap the huge political gains many had hoped for.

So far this year, the central bank has raised its benchmark interest rate six times, raising the risk that extremely high lending rates – for mortgages, auto purchases and other high-cost expenses – could push the world’s largest economy into recession. will put

Stock futures rose on Thursday’s news, with investors hoping that signs inflation is beginning to moderate, persuading the Fed to slow the pace of interest rate hikes.

“A better-than-expected 0.3% m/m increase in core consumer prices in October will not in itself persuade the Fed to abandon its hardline stance. But we expect it to mark the start of a much longer deflationary trend that will continue. We think that will require the Fed to halt its tightening cycle early next year, reaching the policy rate from 4.50% to 4.75% and cutting rates before the end of 2023, Capital Economics’ Paul Ashworth said in a research note. persuade to start.

This is a developing story. The Associated Press contributed reporting.

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