As Reuters reported earlier this week consumer prices fell in October. It means that the cost of living unexpectedly fell in the U.S. last month. It could be a sign that at least some of the inflationary pressure is starting to subside. For comparison purposes: a year ago overall consumer prices rose by 3.5%.
Earlier this week the Labor Department indicated that prices dropped 0.1 percent in October. This happened for the first time in four months. Americans paid less for new cars and gasoline (a drop of about 3.1% in gas prices.) Economists predict the fuel prices may be falling further this month. However, prices outside of food and energy (clothing prices, for example) increased by approximately 0.4%. This indicated a small increase in overall prices.
Another good piece of news was a separate report by the Labor Department that showed weekly earnings rising 0.3 percent in October. Inflation was already accounted for in this number. A separate report from the Feds showed that industrial production rose 0.7 percent in October. These results beat any economists’ expectations.
Hopefully, all of the above will take some pressure off American households right before the Holiday season, promoting consumer spending and boosting the economy just a notch. But in spite of some positive economic indicators, there is still a concern for the recovery which mostly depends now on what happens in Europe.