Price increases moderated in the United States in October, the latest sign that inflation pressures may be easing as the economy slows and consumers become more cautious.
Consumer inflation was 7.7% a year in October, and 0.4% a month compared to September, the Labor Department said Thursday. The annual increase was the smallest since January. Core inflation – which does not include volatile food and energy prices – rose 6.3% annually and 0.3% monthly.
All figures were lower than economists expected.
Despite these data, the Federal Reserve is expected to continue raising interest rates to continue containing inflation. However, many economists warn that if it continues to tighten credit aggressively, the Fed is likely to trigger a recession next year.
So far this year, the US central bank has increased its benchmark interest rate six times with considerable adjustments, which in turn makes other loans such as mortgages, car purchases and other high-cost expenses more expensive, generating fears of a possible recession.
Inflation was among the top concerns of many voters in Tuesday’s midterm legislative elections. His economic anxieties contributed to the loss of Democratic seats in the House of Representatives, even though Republicans failed to make the huge political gains many hoped for.
According to other indicators, in addition to data from the Department of Labor, inflation has begun to ease and could continue to do so in the coming months. Most indicators of workers’ wages, for example, show that the solid gains of the last 18 months have leveled off and have begun to fall. Although wages are not the main cause of rising inflation, they can aggravate inflationary pressures if companies offset higher labor costs by charging customers more.
On the other hand, with the exception of automakers, which are still struggling to acquire the computer chips they need, supply chain disruptions have largely eased.
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