The latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS) indicates that inflation in the United States is gradually easing. The headline CPI, which measures the change in prices for a broad basket of consumer goods and services, remained unchanged in October 2023, following a 0.1% increase in September. Over the past 12 months, the CPI has risen by 3.2%, down from 3.7% in September.

Food and Energy Prices Continue to Fluctuate

The food index increased by 0.2% in October, driven by higher prices for fruits and vegetables. Over the past 12 months, the food index has risen by 3.3%. The energy index, on the other hand, decreased by 4.5% in October, reflecting lower prices for gasoline and other fuels. Over the past 12 months, the energy index has declined by 4.5%.

Shelter Costs Remain a Major Driver of Inflation

The shelter index, which measures the cost of housing, increased by 6.7% over the past 12 months, accounting for over 70% of the total increase in the all items less food and energy index. Other indexes with notable increases over the past year include motor vehicle insurance (+19.2 percent), recreation (+3.2 percent), personal care (+6.0 percent), and household furnishings and operations (+1.7 percent).

Overall Outlook for Inflation

Recent CPI data suggests that inflation is gradually moderating in the United States. However, it is important to note that inflation remains above the Federal Reserve’s 2% target. The Fed is expected to continue raising interest rates in an effort to bring inflation down.

Key Takeaways

The CPI remained unchanged in October 2023, indicating that inflation is gradually easing. The food index increased by 0.2% in October, while the energy index decreased by 4.5%.

The shelter index remains a major driver of inflation, having increased by 6.7% over the past 12 months. The Fed is expected to continue raising interest rates in an effort to bring inflation down.

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