Inflation holds grip on US economy in October as prices remain stubbornly high

Inflation cooled more than expected in October, but consumer prices remained near a multi-decade high, continuing to squeeze millions of U.S. households and small businesses.

The Labor Department said Thursday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in October from the previous month. Prices climbed 7.7% on an annual basis. 

Those figures were both lower than the 8% headline figure and 0.5% monthly increase forecast by Refinitiv economists, a potentially reassuring sign for the Federal Reserve as it tries to tame runaway inflation with a series of aggressive interest rate hikes. It marked the slowest annual inflation rate since January. 

In another sign that suggests underlying inflationary pressures in the economy are starting to slow, core prices –  which strip out the more volatile measurements of food and energy – climbed 0.3% in October from the previous month, down from 0.6% in September. From the same time last year, core prices jumped 6.3%.