Following steep price hikes affecting everything from groceries to housing, new data shows American consumer prices slightly edged up.
The U.S. Bureau of Labor Statistics on Wednesday released its Consumer Price Index, a key marker of inflation, measured by the change in prices paid by consumers for goods and services. At 2.6% in October, it is just shy of twice when the Biden administration took office in January 2021 (1.4%) and significantly less than a 40-year high of 9.1% some 17 months later in June 2022.
The index rose 0.2% from September. It went below 3.0% in July, breaking a stretch of 39 consecutive months.
“The index for all items less food and energy rose 3.3% over the past 12 months,” the Bureau of Labor report said. “The shelter index increased 4.9% over the last year, accounting for over 65% of the total 12-month increase in the all items less food and energy index.”
Earlier this week, the U.S. Federal Reserve confirmed a quarter-point interest rate cut and lowered the target range from 4.5% to 4.75%, the second cut made in 2024 to encourage borrowing and spending without sparking a new wave of inflation.
Much of the increase was driven by increased rent costs, up 0.4%, a 0.2% jump since September.
According to the report, rent accounted for more than half of the monthly increase in the all items index. The numbers show that the index for food at home rose 0.1% over the month, while food away from home increased 0.2%.
Ultimately, food away from home rose 3.8% over the last year.
Five of the six major grocery store food groups increased. Cereal and bakery items rose 1%, while the bread index rose 1.9%.
Dairy and related products increased by 1% in the month, while fruits and vegetables increased by 0.4%, the same as nonalcoholic beverages.
Meats, poultry, fish, and eggs decreased 1.2%, while the report shows a 6.4% decline for eggs over the month.
Energy has stayed unchanged since September, with the gasoline index showing a 0.9% decline compared to the previous month.
Real wages are up 1.4%, which Jamie Cox, managing partner at Harris Financial Group in Richmond, says is the real story in the report.
Cox, in an email to The Center Square, said the increase continues the trend of wages outpacing inflation over the past 18 months.
“Wages are the real story in the CPI report – real wages are up 1.4%, which continues the trend of wages outpacing inflation over the past 18 months,” Cox wrote. “This is very supportive of above trend growth in the economy.
“Inflation is and has been a lack of housing problem – this report suggest that stubborn trend has not yet abated.”
While real wages are up to 1.4% compared to 1% reported in October 2023; the month-to-month increase was reported at 0.1%.
Other indexes that show increases over the last year were motor vehicle insurance 14%, medical care 3.3%, education 3.8%, and personal care 2.5%.
