[The Epoch Times, November 12, 2022]U.S. residents are finally seeing some relief in inflation. The latest consumer price index (CPI) data released on Thursday (November 10) showed that inflation has slowed further and fell more than economists had expected.
While prices still rose rapidly at 7.7% over the past 12 months, annual inflation fell below economists’ expectations of 7.9% and 8.2% in September. The 0.4% monthly increase in the consumer price index, the benchmark report for measuring inflation, was also below the 0.6% increase economists had expected.
Still, U.S. inflation is near its highest level since the 1980s, putting pressure on U.S. households’ consumer spending. Soaring prices for food, housing and other basic needs continue to rise, squeezing the economy all the way down.
But the slowdown in the pace of inflation in October brought some comfort to those struggling.
used car prices
The used car market was one of the first sectors of the economy to bear the brunt of the inflation surge. Now, people are finally seeing used car prices start to drop.
“As auto supply recovers, and demand is constrained by interest rates,” Preston Caldwell, director of the U.S. economics department at Morningstar Research Services, wrote in an analysis on Thursday. The rise has been hit hard, and the rise in used car prices is now fading.”
In October alone, prices for used cars and trucks fell 2.4%, the fourth consecutive month of declines. While prices are still well above pre-pandemic levels, Americans looking for a used car or truck can finally see the situation begin to ease after months of shortages and clogged supply chains.
For much of 2020 and 2021, used car and truck prices have soared as supply chain issues and shortages hampered production by automakers around the world. But progress has been made in the recovery of the supply chain, making it easier for buyers to trade in old cars at home.
cheaper household items
Prices of a variety of basic household items also began to fall in October, as consumers began to spend more time finding relatively inexpensive products and spending less on once-high-consumption items.
Prices of household goods and furniture fell broadly by 0.2% in October, with sharp falls in the prices of appliances, tableware, furniture and bedding. Many of these commodities were popular with U.S. households under lockdown during the height of the pandemic and have been hit by supply chain issues that have pushed up their prices.
Apparel and Accessories
Clothing prices fell 0.7% in October after rising 4.1% over the past year. Among them, the biggest declines were in women’s outerwear, infant clothing and men’s formal wear. In addition, jewelry prices also fell sharply.
The drop in clothing prices comes ahead of the holiday shopping season, prompting economists to watch closely for signs of waning consumer purchasing power.
According to the National Retail Federation (NRF), consumer spending between Nov. 1 and Dec. 31 could total as much as $960 billion, which would be a record. During 2020 and 2021, sales increased by 13.5%. But the group expects that growth to slow after a prosperous year for the industry.
domestic gas
Homes that use natural gas for heating or cooking may have gotten a respite in October as the price of utility gas service plunged 4.6%. It was one of the few parts of the energy industry that saw price declines in October. During the month, fuel oil prices surged nearly 20%, while gasoline prices rose 4%.
High prices for oil and gas have been one of the main drivers of a surge in inflation. While prices are destined to rise from 2020 levels — when global pandemic lockdowns curbed energy use — the war in Ukraine has fueled wild swings in energy markets.
Food price growth slows
Food prices in the U.S. are still rising, largely because the Ukrainian war has limited global supplies of wheat and fertilizer. Food prices are up 10.9 per cent year-on-year this year, with groceries alone rising 12.4 per cent since October.
The October inflation report showed that while prices are still rising, their rate of rise has slowed. And this is the first step towards smoothness.
In October, food prices rose 0.6%, slowing from 0.8% gains in August and September and three straight months of gains of at least 1% from May to July.
Monthly inflation for groceries also fell to 0.4% in October from 0.7% in September.
Responsible editor: Ye Ziwei