2023-11-14 13:58:57
(Washington) Inflation fell again in the United States in October, after several months of rebound this summer, good news both for Joe Biden, less than a year before the presidential election, and for the bank central, which wants to curb this surge in prices.
The price increase stood at 3.2% year-on-year in October, compared to 3.7% in September, according to the CPI index published Tuesday by the Labor Department.
These figures are a “pleasant surprise,” commented Jason Furman, Harvard professor and former White House economist, in a tweet.
This is the first time since June that this index has fallen and, over just one month, it even fell to zero, with prices identical to those of September.
Analysts expected, for general inflation, 0.1% over one month, and 3.3% over one year, according to the MarketWatch consensus.
Gasoline prices at the pump, in particular, have fallen. Hotel nights, used cars and plane tickets also cost less.
But those for food remained on the rise, as did housing, car insurance and even health care.
Another measure that has fallen sharply: so-called core inflation, which excludes volatile food and energy prices, is at its lowest in more than two years, at 4.0% over one year. It is 0.2% over one month, compared to 0.3% in September.
Biden hails “progress”
Prices soared after COVID-19, in the United States as elsewhere in the world, and inflation reached its highest level in more than 40 years in June 2022, at 9.1%, then fell, to falling to 3.0% a year later.
But, driven by the prices of housing and gasoline at the pump, it started to rise again this summer.
This decline in all inflation figures is good news for American President Joe Biden, less than a year before the presidential election.
He welcomed, in a press release, this “new progress in reducing inflation (which is being achieved) while maintaining one of the strongest labor markets in history”. And sees this as the result of his economic policy.
Persistent high inflation was a thorn in the side of the Democratic president. The Republican opposition accuses its recovery plans, which injected billions of dollars into the economy, of fueling the surge in prices.
And it also caused the New York Stock Exchange to jump at the opening Tuesday morning.
Too high
But to contain the rise in prices, it is the American central bank, the Fed, which holds the reins. To achieve this, it has raised its interest rates 11 times since March 2022, bringing them to their highest level in 22 years, in a range of 5.25 to 5.50%.
This has the effect of slowing down consumption and investment, and therefore easing pressure on prices.
At the last two meetings however, in September and October 31-1is November, Fed members chose to keep rates at the same level, to give time for successive increases to produce their full effects on the economy.
“I think the Fed will be pleasantly surprised” by the October inflation figures, Craig Erlam, analyst for Oanda, told AFP.
He noted that this increases the chances that the Fed will not touch its rates at the next meeting in mid-December.
However, Fed officials have hammered it home: inflation has certainly fallen considerably, but it remains too high. And they will not hesitate to make further increases in key rates if necessary.
They want to reduce price increases to 2.0% over one year, but favor another measure of inflation, the PCE index, which will be published at the end of the month, after having remained stable in September, at 3. 4%.
And the much-heralded recession? Many economists now believe that the United States could ultimately escape it.
1699979349
#Inflation #slows #October #United #States