US CPI Inflation Rises For First Time In Seven Months To 2.6% In October 2024; Key Details Here

US consumer price index (CPI) inflation accelerated mildly to 2.6% in October 2024, remaining higher than the US Federal Reserve's target of 2%. The data is in line with market expectations. Notably, this also marks the first surge in CPI after seven months.

The inflation print has been easing since March to September 2024. In the last month, CPI was at 2.4% which was the lowest since February 2021.

Coming to October 2024, as per the U.S. Bureau of Labor Statistics data, the all items less food and energy index rose 3.3 per cent over the last 12 months.

Among sectors, the energy index decreased 4.9 per cent for the 12 months ending October. The food index increased by 2.1 per cent over the last year.

Further, the data highlighted that the index for all items less food and energy rose 0.3 per cent in October, as it did in August and September. Indexes that increased in October include shelter, used cars and trucks, airline fares, medical care, and recreation. The indexes for apparel, communication, household furnishings, and operations were among those that decreased over the month.

The index for shelter rose 0.4 per cent in October, accounting for over half of the monthly all-items increase. The food index also increased over the month, rising 0.2 per cent as the food at home index increased 0.1 per cent and the food away from home index rose 0.2 per cent. The energy index was unchanged over the month, after declining 1.9 per cent in September.

Earlier this month, the FOMC, led by chair Jerome Powell, trimmed key interest rates by 25 basis points while seeking to achieve maximum employment and inflation at 2%. The FOMC's latest rate decision comes after the US Presidential Election, in which Republican Donald Trump returned to power.

In its statement, FOMC said that the risks to achieving its employment and inflation goals are roughly balanced. However, it added, "The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate."

During the press conference, Jerome Powell stated that FOMC is pursuing rate cuts as monetary policy is tight. He even added that even with the latest cut, the policy remains restrictive.

Fed's latest federal funds rate is now at 4-1/2 to 4-3/4 per cent.