Inflation accelerated in October, providing the first look at prices since the election

Consumer prices rose 2.6% in October from a year ago, up from the previous month and reversing some of the cooling seen in recent months. US Bureau of Labor Statistics That became apparent on Wednesday. The new report met economists’ expectations.

The latest update offered a look at the price increases, just over a week after the issue appeared staff former President Donald Trump wins re-election. The data showed a streak of six consecutive months of cooling inflation.

Core inflation – a closely watched measure that excludes volatile food and energy prices – rose 3.3% in the year ended October, consistent with the previous month, the data showed.

Food prices rose 2.1% in the year ended October, marking a slower increase than the overall pace.

Over the past year, prices for a number of common groceries, such as white bread, bacon and bananas, have fallen. However, the price of eggs has risen by as much as 30% in the past year, mainly due to an outbreak of bird flu that has decimated supply.

Gasoline prices were a bright spot in Wednesday’s report, falling more than 12% for the year ending in October. Gasoline prices typically drop in the final months of the calendar year as motorists reduce their consumption after the busy summer season.

Overall, inflation has been chilled dramatically since a peak of 9% in 2022, which now hovers near the Federal Reserve’s target rate of 2%.

The slowdown in price increases has coincided with robust economic growth, creating the conditions necessary for the US to experience a “soft landing.”

Still, policymakers at the Fed predict that inflation will slowly fall to normal levels next year and reach the central bank’s target rate in 2026, according to projections. issued in September.

The Fed cut interest rates cut by a quarter of a percentage point last week. The move came two months after the Fed cut its benchmark interest rate by half a percentage point, reversing the fight against inflation since the start of 2021.

The Fed is guided by a dual mandate to control inflation and maximize employment. In theory, lower interest rates help stimulate economic activity and boost employment.

As central bank concerns about inflation have subsided in recent months, a renewed focus on the labor market has come to the fore. Employment has continued to grow, but expansion is underway delayed the past few months. The unemployment rate has risen from 3.7% to 4.1% this year.

“We remain confident that with an appropriate recalibration of our policy stance, the strength of the economy and the labor market can be maintained while inflation can sustainably decline to 2%,” Fed Chairman Jerome Powell said at a news conference in Washington, DC. last week.

Even as inflation has eased, that progress has not reversed price increases dating back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed by more than 20%.

The price increases appeared to fuel support for Trump in last week’s election. More than two-thirds of voters say the economy is in bad shape, according to An’s preliminary results ABC News exit poll.

However, Trump’s proposals for higher tariffs and the mass deportation of undocumented immigrants could reignite rapid price increases, some experts say. told earlier ABC News.

When asked last week about the Fed’s possible response to Trump’s policies, Powell said the central bank would make its decisions based on how policy changes could affect the economy.

“In the short term, the election will have no impact on our policy decisions,” Powell said said on Thursday. “We do not know what the timing and content of any policy changes will be. We therefore do not know what the effects on the economy will be.”

“We don’t guess, we don’t speculate and we don’t assume,” Powell added.