Dawit Kebede

CUNA economics: Inflation cools in October

November 13, 2022

CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s October Consumer Price Index Report:     

“The Consumer Price Index (CPI) rose 7.7% relative to a year ago. This is the lowest increase for the year as prices for used cars, air travel, and medical care declined in October. The increase in core-CPI (prices excluding food and energy) also slowed down from 0.6% in September to 0.3%. CUNA forecasts inflation by year-end will be 7.5%. 

“Housing price contributed for over half of the 0.4% increase in overall monthly prices. If housing remained flat compared to September, the annualized October inflation would have been lower than 2.4%. There is a lag of up to 18 months between current market price and the CPI for housing. The CPI reflects increases from a few months ago but current market price for housing is cooling down.  

“Overall, the October inflation report shows signs of prices slowing down. A 7.7% headline inflation is still much higher than the Federal Reserve's target. Hence, the Fed may raise interest rates by 50 basis points in December.”