(Washington) Inflation slowed 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 central bank, which wants to curb this surge in prices.
The price increase stood at 3.2% over one year, 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 message published on X.
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 rebounded 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 [qui sont réalisés] 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
To contain the rise in prices, it is the American central bank, the Fed, which holds the reins. It has raised its main policy rate 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.
During the last two meetings, however, in September and early November, Fed officials chose to keep rates at the same level, to give time for successive increases to produce their full effects on the economy.
These figures could convince her not to touch it again at the next meeting in mid-December.
The President of the Chicago Fed, Austan Goolsbee, who has rotating voting rights in 2023 within the institution, was confident on Tuesday about the possibility of seeing inflation fall, while maintaining solid economic growth. , and therefore a vigorous labor market.
“It’s more than a soft landing. “It’s the softest of all soft landings,” he told the Economic Club of Detroit, Michigan.
Many economists now believe that the United States will be able to escape the much-heralded recession.
However, Fed officials have made it clear: they will not hesitate to raise rates again if inflation does not slow down sustainably. 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.