Last month, U.S. inflation dropped to its lowest level since February 2021, paving the way for another potential interest rate cut by the Federal Reserve and contributing to a wave of positive economic data in the final weeks of the presidential campaign.
The consumer price index rose by 2.4% in September compared to the previous year, slightly above the 2.3% expected by economists but lower than the 2.5% annual increase recorded in August, according to a survey by FactSet.
This modest increase, likely driven by lower gas prices and a minimal rise in food costs, is just above the Fed's 2% inflation target. For context, inflation had surged to 9.1% just over two years ago.
This positive inflation report comes on the heels of a strong jobs report, showing increased hiring in September and a drop in the unemployment rate from 4.2% to 4.1%. Additionally, the government reported that the economy grew at an annual rate of 3% in the second quarter, with similar growth expected in the recently completed third quarter.
Cooling inflation, stable job growth, and solid economic performance may weaken former President Donald Trump's lead on the economy in the race, as polls show Vice President Kamala Harris closing the gap. Some surveys now show Harris equaling Trump on the question of who would better manage the economy, despite Trump having previously led President Joe Biden in this area.
"The positive news is that the overall trend points to lower inflation, though services inflation remains a concern," said Olu Sonola, head of U.S. Economic Research at Fitch Ratings. "Inflation is fading, but it's not gone yet." He added.
Source:
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Tehran Times
