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Inflation in the U.S. ticked up in October, driven by costlier rents, used cars and airfares, a sign that price increases might be leveling off after having slowed in September to their lowest pace since 2021.
Consumer prices rose 2.6% from a year earlier, the Labor Department said Wednesday, up from 2.4% in September. It was the first rise in annual inflation in seven months. From September to October, prices edged up 0.2%, the same as the previous month. Excluding volatile food and energy costs, “core” prices rose 3.3% from a year earlier, the same as in September. From September to October, core prices rose 0.3% for a third straight month. Over the long run, core inflation at that pace would exceed the Fed’s 2% target.
An uptick in prices, if sustained, could stir concerns in financial markets that progress in taming inflation may be slowing. It might also make the Federal Reserve less inclined to cut its key interest rate in the coming months, as its officials have previously indicated they likely would.
Still, most economists think inflation will eventually resume its slowdown. Consumer inflation, which peaked at 9.1% in 2022, has since fallen steadily, though overall prices are still about 20% higher than they were three years ago.
