US Inflation Continues to Weaken

US underlying inflation continued to weaken in October, with the core personal consumption expenditures (PCE) price index rising 0.2% on a monthly basis and 5.3% year-over-year. This was the slowest annual growth in core PCE prices since September 2021.

The decline in inflation was driven by a moderation in the prices of goods, such as used cars and apparel. However, the prices of services, such as housing and healthcare, continued to rise at a relatively fast pace.

The Federal Reserve is closely monitoring inflation data as it considers when to begin raising interest rates. The Fed has said that it wants to see inflation return to its 2% target before it begins to tighten monetary policy.