Minneapolis
CNN Business
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Consumer prices rose 7.7% in the year to October, according to data released Thursday. The report was better than expected and surprised investors, with markets rallying on the news. But the Federal Reserve still has a long way to go in its battle to control inflation.
The Consumer Price Index, which measures changes in the prices of a variety of consumer goods and services, was lower than the 8.2% reading in September.
“Today’s CPI report shows that inflation is moving in the right direction,” said Eric Merlis, managing director and co-head of global markets at Citizens. “The report provides ammunition for the Fed to start pricing in adjustments of less than 75 basis points. This will be a welcome development for the Fed.”
On a monthly basis, prices rose 0.4%. That’s on par with the previous month’s increase of 0.4%. Economists had expected the monthly figure to rise, given the surge in energy prices in October.
Still, there appeared to be some gains in a gauge watched even more closely by the Fed: Core CPI, which excludes the more volatile categories of food and energy, was 6.3% for the year to October and below of the 6.6% increase. published in September.
Month on month, the core CPI increased by 0.3%. It had recorded monthly increases of 0.6% in both August and September.
This story is developing and will be updated.