Here’s the breakdown of inflation in October 2024 – in one chart | Real Time Headlines

Progress in taming struggle Inflation in the pandemic era Consumption appeared to have stalled in October despite lower gasoline prices and moderation in prices for other consumer goods such as groceries.

At the same time, economists believe that if implemented, policies such as import tariffs proposed by President-elect Donald Trump may… exacerbating inflationhas not yet fallen below policymakers’ long-term goals.

this consumer price indexThe main inflation indicator in October increased by 2.6% compared with the same period last year, an increase of 2.6% compared with the same period last year. Growth in September was 2.4%the Bureau of Labor Statistics reported Wednesday. The reading is conform to economists’ expectations.

Economists and policymakers said that while October’s increase appears to be a setback, consumers can rest assured that overall price pressures are continuing to ease.

Federal Reserve Chairman Jerome Powell said on Thursday that economic data showed inflation “continues to take a bumpy road to decline.”

“Right now, one or two really good data months or really bad data months are not going to really change the landscape,” Powell told a news conference.

Stephen Brown, deputy chief economist for North America at Capital Economics, echoed the sentiment: “The overall (inflation) trend is positive,” he said.

In fact, the rise in annual inflation is at least partly due to a statistical oddity: monthly inflation rate Economists said the October 2023 data was unusually low, making the October 2024 data look relatively high in comparison.

Inflation has pull back This is a significant decrease from the peak of 9.1% in June 2022 during the pandemic.

However, there are still some trouble spots.

For example, car insurance prices have increased 14% since October 2023, according to CPI data.

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Brown said there was “upward pressure” on vehicle insurance premiums, largely due to the lagged effects of early inflation dynamics.

For example, new and used car prices began to soar in 2021 due to a shortage of semiconductor chips used to make cars; Brown said it will be much more expensive for insurance companies to replace vehicles after a car accident because of the price shock. Insurers also typically need regulatory approval to raise consumer premiums, a process that takes time, he said.

Brown said “lagged effects” were affecting other categories as well, contributing to overall slow progress in controlling inflation.

Housing inflation has slowed slowly painfullyThat’s despite inflation falling sharply in rental markets across the country, economists say.

“Market rents, inflation on newly signed leases are very low,” Powell told a news conference.

Because of differences in the way federal statisticians compile the Consumer Price Index, housing inflation takes a long time to adjust to the housing context. In short, its slow upward or downward adjustment is by design.

“So it’s just a matter of catching up,” Powell said. “That doesn’t really reflect current inflationary pressures.”

The CPI inflation rate increased month by month in October, rising to 0.4% from 0.2% in September. annual inflation rate has dropped down from a peak of over 8% in early 2023 to less than 5%.

Mark Zandi, chief economist at Moody’s, said housing problems are “a continuing major obstacle to a rebound in inflation.”

The Fed’s long-term annual inflation target is about 2%.

Grocery inflation fell to 0.1% month-on-month from September to October, down from 0.4% last month. Grocery prices are Up about 1% From October 2023.

They are “very, very tame,” Zandi said.

He said that despite various supply and demand characteristics leading to higher prices for certain foods. For example, avian influenza is fatal to chickens and other birds, and it has negatively impacted the egg supply and egg supply. causing prices to rise 30% in the past year; similarly, a Orange crop failure It pushes up the price of oranges by 7% every year.

The price of a gallon of gasoline fell 1% this month, according to CPI data. Prices fell by more than 12% last year.

“Gas prices have dropped significantly,” Zandi said. He said the average price could fall further, to below $3 a gallon. As of November 11, the average price was $3.05 per gallon according to to the U.S. Energy Information Administration.

“We can get more relief there because of weak global oil prices,” Zandi said.

Zandi said the weakness may be due to expectations of President-elect Trump’s proposed China policy. Those ones may include Impose tariffs of at least 60% on Chinese imports with huge oil demand. If Trump’s policies have a negative impact on China’s economy, it could also curb China’s oil demand.

Trump has proposed imposing broader tariffs on all goods imported into the United States, possibly 10% or 20%. Deport millions of undocumented immigrants and enacting a package of tax cuts.

Economists say such policies, if implemented, could exacerbate U.S. inflation.

“While we believe inflation remains on a deflationary trajectory, we now believe risks are clearly tilted to the upside,” Bank of America economists wrote in a note on Monday. “These risks stem from potential policy changes, and Not economic fundamentals.”

Imposing import taxes on goods could cause U.S. companies to Raise the prices of these itemsFor example, economists say. Fewer immigrants in the labor market could prompt businesses to raise wages to attract job seekers and retain workers, while tax cuts could put more money into consumers’ pockets and increase their spending.

“Indeed, we believe growth-enhancing fiscal policy, tariffs, and tighter immigration policies, if implemented, are potential sources of upside risk to inflation in the coming years,” Bank of America economists wrote.

Without Trump’s policies, annual inflation would likely be around 2.1% by the end of 2025, Capital Economics’ Brown said. If enacted, the figure would likely be around 3%, which was a “rough estimate,” he said.

“The return of inflation to the 2% target is likely to be short-lived,” Brown wrote in a research note on Wednesday.

However, economists say much depends on how, when and if these policies are enacted.