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Inflation Calming Down – October Numbers Better Than Anticipated

According to a report that was released earlier in November, the Consumer Price Index had a total rise of 7.7% for the year ending in October. This may be a relieving sign for Americans that have been suffering the consequences of inflation for quite some time now, as this number is the lowest annual inflation reading since January.

Stock Market Boost.

The 7.7% for the year ending in October is a slower pace than what economists predicted, as many were expecting the number to be around 8%.

Following the release of this report, the stock market began to soar. Dow futures were elevating by over 800 points, which likely has to do with Wall Street’s hopes that the Fed will ease up on their relentless interest rate hikes.

Still, Work to Be Done

Earlier in the month, Jerome Powell who is the Chair of the Federal Reserve of the United States said in a statement that the central bank still has “Some ways to go” when it comes to the effort to combat inflation. Despite this, there is still growing optimism that the Fed will start easing up on rate hikes sooner than later.

According to Fed funds futures, there is about an 80% chance that the Fed will decide on a hike of half a point. This is slightly lower than the previous increases that were three-quarters of a point.

Have We Reached Peak Inflation?

Prices have risen by 0.4% on a monthly basis, which is identical to the 0.4% increase seen last month. This number was predicted by Economists to grow, as they anticipated the monthly figure to increase due to rising energy prices and other economic factors such as the Russia & Ukraine conflict.

Furthermore, Core CPI, which is a measurement the Fed uses that excludes unpredictable categories such as energy and food measured at 6.3% at the end of October. This is a .3% decrease from the number that was posted in September.

Day-to-Day Impact

While everything mentioned above suggests optimism, there are still some uncertainties throughout the economy. Greg McBride, who is the Chief Financial Analyst at Bankrate said the following in a statement after the release of the report, “Any meaningful relief for household budgets is still somewhere over the horizon. In categories that are necessities — shelter, food, and energy — we continue to see large and consistent increases. The areas posting declines are for the most part either irregular or more discretionary in nature — airfare, used cars, and apparel.”


Overall, this report certainly can be seen as a good sign, but there are still other factors that will ultimately continue to contribute to rising costs for Americans. According to the Bureau of Labor statistics, the prices of many necessities such as Eggs, Bread, and Milk all continue to rise in terms of prices. With growing expenses still burdening the American people, we can only hope that this report points to a brighter future.

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