You'll finally start to get some relief at grocery stores and when you go shopping, because price growth is starting to slow, the Labor Department's latest report on inflation showed. The year-over-year Consumer Price Index (CPI) was 7.7% in October, lower than the 7.9% that economists had expected. This is a pretty big step down from the annual rate the economy saw in September, when inflation stood at 8.2%.
The index rose 0.4% in October from the month prior (the same pace it did in September), but still came in lower than the 0.6% increase economists anticipated. Rising housing costs contributed over half of the monthly increase.
Core inflation, which excludes more volatile food and energy prices, was 0.3% higher after rising 0.6% in September and up 6.3% from a year ago, easing from a rate of 6.6% the month before.
So this is great news, but what does this mean for you going forward? Even with inflation starting to ease, chances are you're still feeling the economic pain as prices keep rising and the inflation rate remains well above the Federal Reserve's 2% target. But this does mean that as inflation starts to come down, the Fed might not raise interest rates as aggressively as it has been. This means any credit card debt you have won't get as expensive, and interest rates on bank loans (like mortgages) won't climb as fast.
Stocks are charging higher after the better-than-expected inflation report, with the Dow rising 3%, the S&P 500 up over 4%, and the tech-heavy Nasdaq surging 6%.
- Kristin
Programming Note: We'll be taking a short break in honor of the Veterans Day holiday in the U.S. and there won't be a newsletter tomorrow. Enjoy the weekend!
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