Inflation Is Finally Loosening Its Grip, Here’s By How Much
In October the Consumer Price Index only rose to 7.7% which was less the the predicted 8%, indicating that inflation may be slowly subsiding.
Inflation is one of the most important topics of the last number of years. It is a by-product of the global COVID-19 pandemic and has inflicted a series of economic disasters post-pandemic. The main one being increased inflation globally. But this week, the Federal Reserve got some positive news, to the relief of many Americans and people globally.
The Consumer Price Index rose at a slower pace than economists expected in October. They had predicted an 8% rise, but the CPI only rose 7.7%. This is the lowest inflation reading in nine months. Due to this, the stock market increased rapidly overnight, with stocks like Dow Futures gaining 800 points.
While there is still some way to go in the battle to tame global inflation, these signs show that everything is moving slowly in the correct direction for consumers, businesses, and citizens. The feeling is that the Federal Reserve may start reducing some of the parameters they put in place to battle inflation, but that has not been confirmed yet.
In October, prices rose another 0.4%, matching the September price increase. While prices are still growing, economists expected prices to rise higher than they did in October due to increasing energy prices. This increase is due to the war in Ukraine and OPEC+ reducing their production of oil.
The Core Consumer Price Index is down by 0.3% from September. But this index excludes major categories such as food and energy, both of which have increased rapidly this year and caused a cost of living crisis globally. The cost of living crisis has caused many governments to give households a percentage of their energy bills to relieve the crippling increases that people have to live with.
This week’s CPI report is an improvement from the previous month’s higher-than-predicted readings. But as things economically are starting to look brighter, price increases are still causing major issues for everyday people. The relief from the cost of living crisis will not be seen for a while yet.
The categories within the CPI for essential human requirements like shelter, food, and energy are still increasing. But there is a drop in other categories such as airfare, cars, and clothes.
Necessities like shelter, food, and energy prices have increased year after year, according to the Bureau of Labor, and the costs of cupboard staples such as eggs, bread, and milk remain steadily increasing.
This year has been a struggle for everyone, including everyday people and businesses, trying to claw back profit. Having every bill and basic necessity increase by double, if not triple, is causing people to struggle with having enough money for housing, energy, and food. In a first-world country in 2022, that is a crazy reality to live in.
As people are struggling to pay their essential bills, it is leaving a considerably less amount of expendable money, which leaves businesses with fewer customers. The cost of living crisis and inflation has a knock-on effect on pretty much everything, and everyone will be relieved even to see little moves away from these days of hyperinflation and struggle.
