Consumers got more bang for their buck in October 🍨as incomes and spending both rose, 💎and prices stayed flat—an encouraging sign in the Federal Reserve’s fight against inflation.

Prices for goods and services rose a negligible amount in October from September, according to the Personal Consumption Expenditures price index, the Bureau of Economic Analysis said Thursday. The 0.04% rise, rounded off to 0% in official statistics, made for a 3% increase over the last 12 months. That's down from a 3.4% rise in September and the lowest since March 2021. That was slightly lower than the 3.1% consensus forecast among economists, according to Bloomberg LP.  The cooling inflation was largely due to a 2.6% drop in energy prices over the month. 

Income and spending both rose, although less than in previous months. Income rose 0.2%, a slowdown from the 0.4% increase in September,  and spending went up 0.2%, compared to a 0.7% increase in September.

The drop in PCE inflation was especially notable because out of two major measures of inflation produced by the government, it’s the one most closely watched by officials at the Federal Reserve who set monetary policy. The other measure, the Consumer Price Index, released earlier this month, 澳洲幸运5官方开奖结果体彩网:also sho🌜wed priceღs staying flat in October from September.

Lower inflation means less pressure on the Fed to pursue its campaign of anti-inflation interest rate hikes. The Fed has raise⭕d its benchmark interest rate to a 22-year high, driving up borrowing costs for all kinds of consumer loans, and returns on savings instrum🐻ents like certificates of deposits. The goal is to discourage spending and allow supply and demand to rebalance. If inflation stays in retreat, the Fed won’t have to squeeze the economy harder with more rate hikes, and could even inspire officials to cut rates at some point next year.

“Undoubtedly, the Fed will view today’s report as further a sign of progress being achieved and that the current level of monetary restraint continues to be appropriate,” said Ali Jaffery, an economist at CIBC Capital Markets, in a commentary.

The details of the report held further encouraging news for the Fed, whose goal is to get PCE inflation down to an annual rate of 2%. Core inflation, which excludes volatile prices for food and energy, fell to an annual increase of 3.5% from 3.7% in September, hitting its lowest since April 2021. Economists look at core inflation as a better measure of the direction of inflation trends, even though it leaves out some of the most important items in the household budgets of consumers.