October Inflation Report Pushes Dow Futures Way Up

Consumer inflation hit 7.7% from a year ago, the smallest gain since January
By Newser Editors and Wire Services
Posted Nov 10, 2022 8:03 AM CST
October Inflation Report Pushes Dow Futures Way Up
FILE - A customer readies to pump gas at this Ridgeland, Miss., Costco, Tuesday, May 24, 2022. The Labor Department is expected to report consumer prices on Thursday, Nov. 10.   (AP Photo/Rogelio V. Solis, File)

Price increases moderated in the United States last month in the latest sign that the inflation pressures that have gripped the nation might be easing as the economy slows and consumers grow more cautious. Consumer inflation reached 7.7% in October from a year earlier and 0.4% from September, the Labor Department said Thursday. The year-over-year gain was the smallest since January. Excluding volatile food and energy prices, "core" inflation rose 6.3% in the past 12 months and 0.3% from September. The numbers were all lower than economists had expected—7.9% and 0.6%, respectively, per CNBC. Dow futures surged 800 points on the news. The Wall Street Journal notes that the 40-year high was hit in June, when the inflation rate was at 9.1%.

CNBC reports on some of what helped cool the figures: a 2.4% decline in used vehicle prices, a 0.7% drop in apparel prices, and a 0.6% decrease in medical care services. Even before Thursday's figures, inflation by some measures had begun to ease, notes the AP, and it could continue to do so in coming months. Most gauges of workers’ wages, for example, show that the robust pay increases of the past 18 months have leveled off and have begun to fall. Though worker pay is not a primary driver of higher prices, it can compound inflationary pressures if companies offset their higher labor costs by charging their customers more.

Higher mortgage rates have depressed sales. Home prices are slowing sharply compared with a year ago and have begun to fall on a monthly basis. The cost of a new apartment lease is also declining. Yet because of how the government calculates housing costs, economists think the price of housing might have surged in October and elevated broader inflation measures. The government measures the cost of all rents, including most rents that are under existing leases. Asking rents for new leases, though, are slowly declining, which should reduce inflation.

(More inflation stories.)

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