Federal Reserve’s preferred inflation gauge shows price pressures continuing to cool

Nov 30, 2023, 5:43 AM

An Amazon Prime delivery person struggles with packages while making a stop at a high-rise apartmen...

An Amazon Prime delivery person struggles with packages while making a stop at a high-rise apartment building on Tuesday, Nov. 28, 2023, in Denver. (AP Photo/David Zalubowski)

(AP Photo/David Zalubowski)

WASHINGTON (AP) — The Federal Reserve’s preferred inflation measure cooled last month, the latest sign that price pressures are waning in the face of high interest rates and moderating economic growth.

Thursday’s report from the Commerce Department said prices were unchanged from September to October, down from a 0.4% rise the previous month. Compared with a year ago, prices rose 3% in October, below the 3.4% annual rate in September. It was the lowest year-over-year inflation rate in more than 2 1/2 years.

Excluding volatile food and energy costs, increases in so-called core prices also slowed. They rose just 0.2% from September to October, down from a 0.3% increase the previous month. Compared with 12 months ago, core prices rose 3.5%, below the 3.7% year-over-year increase in September. Economists closely track core prices, which are thought to provide a good sign of inflation’s likely future path.

With inflation easing, the Fed is expected to keep its key benchmark rate unchanged when it next meets in two weeks. The latest figures also suggest that inflation will fall short of the Fed’s own projected levels for the final three months of 2023. In September, the Fed’s policymakers predicted that inflation would average 3.3% in the October-December quarter. Prices are now on track to rise by less than that, raising the likelihood that Fed officials will see no need to further raise interest rates.

Since March 2022, the central bank has raised its key rate 11 times from near zero to roughly 5.4% in its drive to curb inflation. Most economists think the Fed’s next move will be to cut rates, with the first cut possibly occurring as early as late spring.

On Tuesday, Christopher Waller, a key Fed official, suggested that a rate cut is possible by spring if inflation continued to head lower. Waller sounded the most optimistic notes of any Fed official since the central bank launched its streak of rate hikes, and he signaled that the rate increases are likely over.

On Wednesday, the government reported that American consumers spent enough to help drive the economy to a brisk 5.2% annual pace from July through September. In Thursday’s report, the government said that consumer spending last month rose a modest 0.2%.

National News

Associated Press

Remember last year’s Memorial Day travel jams? Chances are they will be much worse this year

You didn’t think summer travel would be easy, did you? Highways and airports are likely to be jammed the next few days as Americans head out for Memorial Day weekend getaways and then return home. AAA predicts this will be the busiest start-of-summer weekend in nearly 20 years, with 43.8 million people expected to travel […]

8 minutes ago

Associated Press

5 dead and nearly 3 dozen hurt in tornadoes that tore through Iowa, officials say

GREENFIELD, Iowa (AP) — A deadly tornado that wreaked havoc in the small city of Greenfield, Iowa, left four people dead and nearly three dozen injured, officials said, while a fifth person was killed elsewhere. The twister that tore through the city on Tuesday was rated at least an EF-3 by the National Weather Service […]

59 minutes ago

Associated Press

Thousands of journalists have fled homelands due to repression, threats and conflict, UN expert says

UNITED NATIONS (AP) — Thousands of journalists have fled their home countries in recent years to escape political repression, save their lives and escape conflict – but in exile they are often vulnerable to physical, digital and legal threats, a U.N. investigator said Wednesday. Irene Khan said in a report to the U.N. General Assembly […]

1 hour ago

Associated Press

Texas health department appoints anti-abortion OB-GYN to maternal mortality committee

AUSTIN, Texas (AP) — Texas’ health department has appointed an outspoken anti-abortion OB-GYN to a committee that reviews pregnancy-related deaths as doctors have been warning that the state’s restrictive abortion ban puts women’s lives at risk. Dr. Ingrid Skop was among the new appointees to the Texas Maternal Morality and Morbidity Review Committee announced last […]

5 hours ago

Associated Press

Missouri prosecutors to seek death penalty in killing of court employee and police officer

KANSAS CITY, Mo. (AP) — Missouri prosecutors said Wednesday that they intend to seek the death penalty against a Kansas City-area man who is charged with murder in the killings of a court employee who tried to serve an eviction notice on him and a police officer who responded. Larry Acree, 70, of Independence, is […]

7 hours ago

Associated Press

Abrupt shutdown of financial middleman Synapse has frozen thousands of Americans’ deposits

NEW YORK (AP) — The bank accounts of tens of thousands of U.S. businesses and consumers have been frozen in the aftermath of the abrupt shutdown and bankruptcy of financial technology company Synapse, which acts as a middleman between financial technology companies and banks. Synapse filed for Chapter 11 bankruptcy protection in April and has […]

8 hours ago

Federal Reserve’s preferred inflation gauge shows price pressures continuing to cool