Source: Economics Group of Wells Fargo Bank, N.A.Summary
- The overall consumer price index (CPI) rose 0.4% in October, which was lower than expected. Gasoline prices helped to push up the overall CPI, but consumers caught a break with a smaller increase in food prices. On a year-over-year basis, the overall CPI was up 7.7%, the smallest increase since February.
- Excluding food and energy, consumer prices rose 0.3%, which was also lower than expected. Core goods prices fell 0.4%, which reflects normalizing supply chains and decelerating demand. But prices of core services rose 0.5% in October, pushed higher by another sizable increase in shelter costs.
- The lower-than-expected inflation data in October is certainly welcome news. But the core CPI rose at an annualized rate of 5.8% between July and October, which is still well above the Fed’s target of 2%.