Inflation cooled in October, but it’s only a month


The consumer price index is there, and that’s rather good news. Prices in October were 7.7% higher than they were the previous October, which is terrible, but it’s the smallest increase of any month. since January.

“We are starting to see the first signs of slowing inflationary momentum,” said Gregory Daco, chief economist at EY-Parthenon.

Prices for goods, not including food and energy, fell four-tenths of a percent, “the biggest contraction outside of a recession since the early 1970s,” Daco said.

Yes, if you measure year over year, property prices are still up 5%, but that’s much better than the 12% they were up earlier this year.

“I think we should take comfort in the idea that the supply chain heals, and heals fairly quickly,” said Eric Winograd, chief US economist at AllianceBernstein.

Used car prices have fallen sharply and have been falling steadily since July. Food prices continue to rise, but more slowly than they have in months. The price of services, adjusted for seasonal variations, even fell in October.

On the flip side: “You never want to put too much weight on a month of inflation,” said Alan Detmeister, economist and chief executive at UBS. “A lot of people were really excited about the March downturn, a lot of people were excited about the July downturn, and none of those turned out to be a lasting downturn.”

Detmeister said many categories whose prices are determined by salaries — think haircuts and restaurant prices — aren’t slowing down. That said, he is optimistic that we have finally passed the peak of inflation.

That would mean the Federal Reserve could ease its interest rate hikes, said Joe Gagnon, a senior researcher at the Peterson Institute for International Economics.

“Another month like this would certainly support a slowdown to 50 basis points or even 25 very soon.”

Yet, he said, when it comes to inflation, there is still a long way to go.

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