Consumer Price Index sees lowest year-to-year jump since January

CARBONDALE, Ill. (KBSI) – It was an encouraging sign for consumers on Thursday as the Consumer Price Index saw its smallest year-to-year jump since January. 

The CPI jumped 7.7 percent from last October, lower than the expected 7.9 percent. 

Southern Illinois University Professor of Economics Kevin Sylwester said we will be able to tell in future months whether or not this cooldown is just a blip on the radar. 

“You get a piece of either exceptionally good or exceptionally bad data and you wonder if that’s just a blip or if it’s a sign of things to come,” he said. “A month from now, people are really going to be looking heavily at the inflation numbers for November to see if the progress made in October continues.” 

Sylwester likened the inflation numbers to a surprise performance from a struggling sports team. 

“Think about a sports team that’s maybe not very good and it has a big win. Were they just lucky? Was that a one-time event? Or is this a sign that they are getting better and we should expect more such performances down the road?” he said. “Only time will tell.” 

The Consumer Price Index factors in volatile markets like food and energy, which results in greater change in overall prices. 

“The overall inflation rate usually does fluctuate a little bit more because it does include these items like food and energy that are more subject to these one-time events, one-time shocks,” Sylwester said.

Although cautiously so, Sylwester is optimistic that the Federal Reserve’s consistent hiking of interest rates will continue to reduce inflation rates baring any seismic events. 

“My gut feeling would be that inflation is starting to slow and we’ll see it continue to slow minus any big shock coming out of the Middle East or something like that, that the Federal Reserve’s policy of raising interest rates is slowly having an effect,” he said.

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