October Sees Unexpectedly Low Consumer Inflation in the US.

October's CPI Data: Inflation Remains Unchanged at 0.0%, Core CPI Modest at 0.2%, Defying Expectations and Prompting Economic and Fed Policy Concerns.

Highlights

• October's CPI stayed the same, going against predictions.
• The main CPI: 0.0% (predicted 0.1%), Core CPI: 0.2% (predicted 0.3%).
• The decrease in US consumer inflation goes against expectations and prompts inquiries.

Summary: The Consumer Price Index (CPI) showed steadiness in October following a 0.4 percent rise in September as reported by the U.S. Bureau of Labor Statistics. The all items index recorded a 3.2 percent increase over the past year prior to seasonal adjustment. In October, the headline CPI was 0.0%, lower than the anticipated 0.1%, while the core CPI was 0.2%, falling short of the expected 0.3% increase.

Housing Costs: The shelter index continued its upward trend in October, balancing out a decrease in the gasoline index, resulting in a stabilized seasonally adjusted index for the month. Meanwhile, the energy index saw a 2.5 percent decrease, particularly due to a significant 5.0 percent drop in the gasoline index, which offset increases in other energy component indexes.

Food Prices: The food index rose by 0.3 percent in October, following a 0.2 percent increase in September. The index for food at home and food away from home increased by 0.3 percent and 0.4 percent, respectively.

Core Inflation: The index for all items excluding food and energy rose by 0.2 percent in October, slightly slower than the 0.3 percent increase observed in September. Noticeable increases were observed in indexes related to rent, owners’ equivalent rent, motor vehicle insurance, medical care, recreation, and personal care. Conversely, the indexes for lodging away from home, used cars and trucks, communication, and airline fares declined during the month.

Yearly Trends: Over the 12 months ending in October, the all items index increased by 3.2 percent, showing a moderation compared to the 3.7-percent increase in the 12 months up to September. The all items excluding food and energy index experienced a 4.0 percent rise over the previous 12 months, marking its smallest change since September 2021. Additionally, the energy index recorded a 4.5 percent decrease, while the food index saw a 3.3 percent increase over the past year.

In conclusion, the October 2023 Consumer Price Index indicates stability in overall prices, particularly highlighting housing costs and food prices. While some core elements saw slight moderation, the yearly trends demonstrate a more measured pace of inflation compared to recent months.