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Market Analysis
CPI Remained Unchanged in October as Energy Costs Cooled
Annual CPI remained unchanged in October at 3.2%. Core CPI rose 0.2%.
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Key Highlights
- Overall CPI: The Consumer Price Index (CPI-U) was unchanged in October, marking a significant slowdown from the 0.4% increase in September.
- Core Inflation: The index for all items less food and energy rose by 0.2% in October, down from 0.3% in September, representing the smallest 12-month change since September 2021, contrary to expectations of a steady rate.
- Energy and Food Prices: The energy index fell by 2.5%, with gasoline prices dropping by 5.0%. Food prices, however, continued to increase, with a 0.3% rise in October.
The October Consumer Price Index (CPI) report reveals a significant slowdown in inflation, aligning closely with economists’ predictions. The CPI for All Urban Consumers (CPI-U) remained unchanged in October after a 0.4% increase in September. This stagnation is a notable shift, reflecting the impact of decreased energy costs, particularly in gasoline prices.
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Key Influences and Variations
The primary contributing factor to the unchanged CPI was a decrease in energy costs, particularly a 5.0% decline in gasoline prices. Conversely, food prices continued their upward trend, albeit at a modest rate. The food index rose by 0.3% in October, slightly higher than September’s 0.2% increase. Core inflation, which excludes food and energy, rose by a modest 0.2%, indicating a deceleration from September’s 0.3% rise.
Long-Term Trends and Comparisons
The year-over-year analysis shows the all-items index rose by 3.2%, a decrease from September’s 3.7% rise. This is the smallest 12-month change since September 2021. Core inflation maintained a steady pace, with a 4.0% increase over the last 12 months. Additionally, the report reflects changes in the health insurance index calculation methodology, aiming to reduce data volatility and time lag.
Do you think the US economy will pull off a soft landing? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
