inflation slows in October, to 6.0% year on year, according to the PCE index, favored by the Fed

inflation slows in October, to 6.0% year on year, according to the PCE index, favored by the Fed

For their part, households saw their income increase by 0.7% over one month, a stronger rise than expected.

Consumer price inflation slowed in the United States in October, to 6.0% year on year from 6.3% in September, according to the PCE index, favored by the American Central Bank (Fed), and released Thursday by the Department of Commerce.

Over one month only, inflation was stable at 0.3%, surprising analysts who had expected a slight acceleration and were counting on +0.4%. Inflation, very high for a year, at levels not seen since the early 1980s, is the priority of the Fed, which is raising its rates to slow down consumption, and therefore the economy. This should make it possible to loosen this pressure on prices. The PCE inflation index is the one she favors, and wants to bring it down to 2%, a level considered healthy for the economy.

CPI slowdown

Another measure, the CPI index, which refers in particular to the indexation of pensions, and had been published two weeks earlier, had also shown a slowdown, to 7.7% over one year against 8.2% in September. , falling to its lowest level since January 2022. In addition, households saw their income increase in October by 0.7% over one month, according to the government, a stronger increase than expected and higher than that of September ( 0.4%). This increase is due to increases in wages, but also in social benefits and state aid.

Consumer spending remains resilient amid 40-year high inflation and rising borrowing costscommented Rubeela Farooqi, Chief Economist for HFE. This consumer spending, in goods and services, should however support US growth, which rebounded in the second quarter after contracting in the first half. Especially since the holiday season has started with a bang, with the promotion days of Black Friday and Cyber ​​Monday.

Sales over the whole season should increase by 6 to 8% compared to last year to reach up to 960.44 billion dollars, anticipates the National Federation of Distribution NRF. However, the risk of recession still hangs over the US economy. But the chairman of the Fed, who is fighting against high inflation by raising the cost of credit, at the risk of slowing the economy too much and causing a recession, was optimistic on Wednesday.

The possibility of achieving asoft landingfor the American economy, which would see inflation return to the nails without plunging the United States into recession, is “very plausible“, estimated Jerome Powell.

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