Prices held steady in October as inflation slowed further
and consumer demand weakened. The consumer price index rose 0.2% in October, the lowest rate since March, according to the U.S. Bureau of Labor Statistics. The index, which measures the change in prices of consumer goods and services over time, has grown only 1% in the past 12 months. Year-over-year inflation has slowed largely due to the declines in transportation fares, energy costs, and the prices of apparel and recreational goods. The moderation in inflation can be attributed to the weakening of consumer demand in the economy. Over the past few months, rising uncertainty over the presidential election, increasing COVID-19 cases, and reduced employment due to extended business shutdowns, have all contributed to weakening consumer sentiment and decreased spending. As a result, businesses have had to lower their prices in order to keep selling their goods and services. The Federal Reserve has said that it will not try to push inflation higher, and that it will continue to provide support to the economy until it is clear that inflation is on track to reach its 2% target. In the meantime, prices look set to remain stable in the short-term, as consumer demand remains weak.