America’s inflation rate declined to an annualized 3.2% in October, helped by declining energy prices.
The latest inflation reading was lower than the consensus forecast among economists, which had called for the Consumer Price Index (CPI) to come in at an annualized 3.3% in October.
In September of this year, the U.S. inflation rate had been 3.7% year-over-year.
On a monthly basis, the U.S. Bureau of Labor Statistics said that inflation was essentially unchanged in October from September. Economists had forecast a 0.1% increase in monthly CPI.
Excluding volatile food and energy prices, so called “core inflation” rose 0.2% on a monthly basis and 4% year-over-year in October, versus forecasts of 0.3% and 4.1% respectively.
It was the smallest 12-month change in core inflation since September 2021.
The U.S. Bureau of Labor Statistics said that inflation was brough lower in October by a 5% decline in gasoline prices during the month, as well as lower costs for used vehicles and airfares.
The decreases were partly offset by higher prices for shelter and food, with grocery costs increasing 0.3% in the month.
The inflation decline increases the chances that the U.S. Federal Reserve will forgo any further interest rate increases this year and may start to cut rates in 2024.
Stocks rallied on news of the October inflation report, with the blue-chip Dow Jones Industrial Average jumping more than 300 points in pre-market trading.