- Consumer prices in October post their lowest reading in five months, with inflation remaining flat as well
- Modest increases in new car prices and airfare offset price drops in several other areas
- Food inflation posts notable increase as grocery prices stabilize and ordering out remains popular
Consumer prices were unchanged in October, down from a 0.2 percent increase in September to reach their lowest level in five months. The reading likely signals an end to an increase in prices over the summer prompted by reopening businesses, and comes in the midst of a new wave of COVID-19 cases that may jeopardize the U.S. economic recovery.
Inflation also remained flat during the month. Overall inflation stood at 1.2 percent, while core inflation (which excludes the more volatile food and energy costs) stood at 1.6 percent. Both figures were within the 2 percent cap set by the Federal Reserve, which will likely allow the Fed to retain extremely low rates. Fed policy has also allowed inflation to climb above 2 percent as part of an effort to promote growth in the labor market.
Overall, higher new car prices and airfare costs offset declining prices for fuel, apparel, health care, and insurance. Food prices showed their greatest inflation since June as grocery prices stabilized and consumers continued to order out for meals.
Used car prices have been increasing considerably during the pandemic as consumers retreat from public transit. However, they fell 0.1 percent after a 6.7 percent increase in September. Used car prices are still 11.5 percent higher than in October 2019.
