Yesterday’s US Consumer Price Index (CPI) figures out of the States came in much higher than expectations with an increase of 0.9% in October, the consensus had been for a rise of 0.6% with 0.4% being last month’s figure. This resulted in the year-over-year-growth rate jumping to 6.2%, the biggest rise in over 30 years, well above the market's consensus of 5.9% . The core metric, ex food and energy, advanced 0.6%, estimates were for 0.4 % whilst year-on-year it came in at 4.3%, 0.3% above estimates.
Drilling down into the figures showed that price pressures were mostly broad-based, as prices increased for food, energy and core components alike. Fuel was up 12.3% on the month, meaning it has now increased by over 59% over the past year. Energy prices overall rose 4.8% in October and are up 30% for the 12-month period. Used car prices rose 2.5%, now up over 26% for the year. Food prices also showed a sizable jump, up 0.9% and 5.3% respectively.
Following the release, President Biden said in a statement that reversing inflation is now becoming his top priority, especially in the energy sector. However, he said there is ‘no question’ that the economy is in ‘better shape than it was a year ago’. The statement said ‘The largest share of the increase in prices in this report is due to rising energy costs—and in the few days since the data for this report were collected, the price of natural gas has fallen. I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector’.