Inflation is still a thing.
Prices were 2.6% higher in October than a year earlier, according to the latest Consumer Price Index, released Wednesday. That's a much lower inflation rate than American consumers endured through most of 2022 and 2023, but it's higher than the inflation rate for September, 2.4%.
Shelter prices rose 0.4% in October, accounting for more than half of the rise in prices overall, the Bureau of Labor Statistics reported.
Lingering inflation illustrates that the nation's inflation crisis is not over, economists said, and that the Federal Reserve's battle against rising prices must rage on.
Inflation had barely registered on America's radar in recent years. But prices spiked in the pandemic, and the annual inflation rate reached a 40-year high of 9.1% in mid-2022. The Fed stepped in, raising interest rates dramatically in 2022 and 2023 to cool the economy. Inflation retreated below 4% in mid-2023, but it still hovers above the 2% target set by federal regulators.
"The ‘last mile’ of progress in getting inflation back to 2% is proving to be a long and arduous one," said Brian Coulton, Fitch Ratings chief economist, in response to the inflation report.
Enduring inflation remained top of mind for Americans headed to the polls for this year's presidential election. In a CBS News exit poll, three-quarters of voters said inflation has been a hardship.
Though inflation has largely abated, prices remain sharply higher: 21.4% higher since February 2020, according to an analysis by the personal finance site Bankrate. For supermarket shoppers who are paying a dollar more for a box of cereal, an easing Consumer Price Index offers little consolation, economists say.
Prices rose dramatically in October in a few categories. Transportation services, a measure of household transportation costs, rose 8.2% on an annual basis. Shelter, the price of housing, rose 4.9%. Electricity rose 4.5%.
"The thorn in inflation’s side remains housing, and this is the primary source of the upside risk to our inflation forecast for 2025," said Ryan Sweet, chief U.S. economist at Oxford Economics, in response to the report.
Other prices declined sharply. Gasoline was down 12.2% in the year ending October. Used car and truck prices slipped by 3.4%. Fuel oil plunged by 20.8%.
'A no-fuss inflation report'
The inflation data perfectly matched forecasts, which had predicted a slightly higher Consumer Price Index in October.
The modest increase set off few alarm bells in economic circles.
"At a time when the market is trying to sort out what potential tariffs, future immigration policy, and debt and deficits mean for the multi-year outlook, a no-fuss inflation report like this one is welcome as one less thing to worry about right now," said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management.