The price increase was moderate in the US last month in the latest sign inflationary pressures who took control of the country could decrease as the economy slows down and consumers become more cautious.
consumer inflation it reached 7.7% in October a year earlier and 0.4% since September, the Labor Department said Thursday. Profit year after year it was the smallest since January. Excluding the volatility of food and energy prices, core inflation has increased by 6.3% in the past 12 months and by 0.3% since September.
This is a sharp decline considering inflation in May had hit 8.6% in the past 12 months, the highest number since December 1981.
The numbers were all below economists’ expectations.
Even with last month’s attempt to ease inflation, the Federal Reserve should continue to raise interest rates to try to stem stubbornly high price increases. However, many economists warn that if it continues to aggressively tighten credit, the Fed is likely to trigger a recession next year.
So far this year the Fed has raised the benchmark interest rate six times in substantial increases, which increases the risk of interest rates prohibitively high (for mortgages, car purchases and other high-cost expenses) push the world’s largest economy into recession.
Inflation was on the minds of many voters in Tuesday’s midterm legislative elections. Their economic anxieties contributed to the loss of Democratic seats in the House of Representatives, albeit Republicans failed to achieve the enormous results politicians that many expected.
falling prices
Even before Thursday’s data, inflation of some measures it had begun to decline and may continue to do so in the coming months.
Most indicators of workers’ wages, for example, show that the solid wage increases of the past 18 months they have stabilized and they began to fall. Although workers’ wages are not the main driver of rising prices, they can exacerbate inflationary pressures if companies compensate for their higher labor costs charging more to their customers.
With the exception of automakers, which are still struggling to acquire the computer chips they need, supply chain disruptions they unraveled largely. Shipping costs have gone down again at pre-pandemic levels. Support for merchant ships off the port of Los Angeles and Long Beach has been authorized.
Falling home rents, according to sites like ApartmentList and Zillow, should also push inflation down.
Healthy employment, battered housing market
Although many fear the economy will slide into recession next year, the labor market has remained resilient. Employers added a healthy average of 407,000 jobs per month, and the unemployment rate is only 3.7%, close to the lowest in half a century. The Job offers they are still at historically high levels.
But the Fed rate hikes have inflicted serious damage to the real estate market American. The average rate on a fixed 30-year mortgage has more than doubled over the past year, surpassing 7% before dropping slightly last week. Consequentially, investment in housing plummeted in the July-September quarter, down at an annual rate of 26%.
Associated Press
ap
Source: Clarin
