Inflation decelerated in October but remains well above the Federal Reserve’s target, with time left for one more interest rate hike before the end of the year, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.
The Consumer Price Index (CPI), a broad measure of the prices of everyday goods, increased 3.2% on an annual basis in October, compared to 3.7% in September, slightly below expectations of 3.3%, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 4.0% year-over-year in October, compared to 4.1% in September.
“The idea that earnings are outpacing inflation is a lie,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Unfortunately, inflation isn’t going away until we get the spending and borrowing in DC under control, and there’s no sign of that happening anytime soon. The lack of stable prices is going to continue dragging on the economy. You simply never have inflation like we’ve seen the last two and a half years and then not have a recession.”
The deceleration was fueled by a decrease of 2.5% in the price of energy just in October, offsetting other increases, according to the BLS. Costs in the sectors of shelter and food both increased in the month, rising 5.5% and 3.3% for the year, respectively, being big contributors to the increase year-over-year.
Inflation has persistently remained far above the Fed’s 2% target, peaking at 9.1% in June 2022. The Federal Reserve, in an attempt to tame inflation, has raised its federal funds rate 11 times since March 2022, to a range of 5.25% and 5.50%, a 22-year high.
The Federal Open Market Committee is set to meet for the last time for the year over December 14 and 15 to decide whether to raise its federal funds rate another 0.25% to put more downward pressure on inflation.
The third quarter of 2023 exhibited above-trend economic growth, with Gross Domestic Product measuring 4.9%. The job market in October slowed down compared to previous months, adding only 150,000 nonfarm payroll jobs in the month compared to 297,000 in September.
“There clearly should be another rate hike in December, but it’s also clear that Powell & Co. have stopped following the data,” Antoni told the DCNF. “As inflation expectations soar — a gauge the Fed purportedly watches closely — they have sat on their hands. In the end, Powell is beholden to his political masters, not the numbers.”
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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
