(CNN) — Inflation moved in the wrong direction last month as price pressures persisted in areas such as housing, used cars and food.
Consumer prices rose 0.2% last month and were up 2.6% from the year before, according to the latest Consumer Price Index data released Wednesday by the Bureau of Labor Statistics.
While it appears that progress on reining in price hikes backtracked a bit, Wednesday’s report underscored that the last mile of taming inflation will be a slog. Housing-related inflation accounted for half of the monthly rise, and energy prices were flat after dragging down the overall index for four of the past six months.
Inflation has eased considerably since peaking at 9.1% in June 2022 and has steadily cooled since earlier year. October’s increase was the first time the annual rate bumped higher since March.
Still, that was to be expected, due to unfavorable comparisons from a year ago and stubborn housing-related inflation. Consensus estimates were for a 0.2% monthly increase and a 2.6% annual increase in the overall CPI, according to FactSet.
The Consumer Price Index measures price changes across commonly purchased goods and services.
Excluding food and energy, two categories that can be quite volatile, core CPI rose 0.3% for the month and 3.3% from the year before, the same increases seen in September.
With underlying inflation holding the line and not showing an acceleration, that leaves the Federal Reserve on track to cut rates further in December, Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said in a statement.
The markets appeared to agree: Projections for a quarter-point cut jolted higher Wednesday to 75.7% from 58.7%, according to the CME FedWatch Tool.
While the central bank has started to loosen monetary policy from its restrictive vice grip of the past two and a half years, Fed Chair Jerome Powell last week noted that “the job’s not done on inflation.”
Plenty of risks remain, including volatility in the Middle East, still-strong consumer demand, and President-elect Donald Trump’s floated plans to hike tariffs and conduct mass deportations.
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