Consumer prices rose 0.2% in October and have risen 2.6% over the past 12 months as inflation slowly but surely returns to pre-pandemic norms, according to new Labor Department figures released Wednesday.
Economists surveyed by the Wall Street Journal had expected the consumer price index (CPI) to rise 0.2% last month and 2.4% over the past year. Core CPI, which excludes more volatile food and energy prices, rose 0.3% last month.
The shelter index accounted for more than half of the month's overall increase at the time, rising 0.4% in October, according to the Labor Department. Shelter prices increased by 4.9% compared to the previous year.
Pandemic-era federal economic stimulus and the strength of the economic recovery sent prices soaring as suppliers struggled to meet demand, pushing the consumer price index to a peak of 9.1% in June 2022.
The Fed isn't yet ready to declare victory over inflation, but the central bank began cutting interest rates in September after raising them to 20-year highs in an effort to curb inflation.
Federal Reserve Chairman Jerome Powell told reporters last week after the central bank announced a second 0.25 percentage point rate cut, following September's 0.50% cut, that “we're not done fighting inflation,” but that inflation said it was on a “sustainable trajectory” to return to 2.5%. percent.
He also declined to “speculate” about the impact on inflation of President-elect Trump's policy proposals, which economists predict could lead to higher inflation, budget deficits and interest rates.
President Trump has proposed imposing 10% to 20% tariffs on imported goods, and Republicans are preparing to consider additional tax cuts, including extending the 2017 tax cut, further lowering the corporate tax rate, and eliminating the tip tax. are.
The president-elect has pushed back against criticism of his economic policies, arguing that the experts are wrong and have consistently misjudged his policy proposals.
“We don't speculate, we don't make assumptions, we don't make assumptions,” Powell told reporters last week when asked how the Fed would consider the election results in future policy decisions. The Federal Open Market Committee (FOMC) will hold one more monetary policy meeting before Trump takes office next year.
“We don't know what the timing or content of policy changes will be, so we don't know what the economic impact will be,” Powell said.
