Inflation fell one-tenth of a percentage point to 2.4% for the year ending in September, the Bureau of Labor Statistics reported Thursday in an update to the consumer price index, the sixth consecutive monthly drop.
The decline is good news for Vice President Kamala Harris, who has been working to highlight falling inflation. Notably, this is the last consumer price index report before the Nov. 5 election.
Most economists expected that annual inflation would fall from 2.5% to 2.3%. So the reading came in a bit hotter than anticipated.
Inflation is now the lowest it has been since February 2021, shortly after President Joe Biden was sworn in.
On a month-to-month basis, inflation rose 0.2%.
Inflation is the biggest concern facing voters, so the White House and Harris campaign are undoubtedly breathing a sigh of relief that there wasn’t an uptick, which would have been a setback, adding to the worries raised by signs of slowing in the labor market. Republicans have worked hard to tie Harris to the economy.
The Federal Reserve, which raised interest rates to their highest level since the turn of the century, will also be pleased to see inflation continuing its descent. Continued declines will allow the Fed to cut interest rates, which would be good news for consumers and the labor market.
The Fed already conducted a half percentage rate cut at its last meeting, the first such downward revision since the start of the pandemic.
Core CPI inflation, a measure of inflation that strips out volatile energy and food prices, rose a tenth of a percentage point to 3.3% on an annual basis, slightly worse than expectations. Month-to-month core inflation punched in at 0.3%.
There has been a bit of a slowdown in the labor market.
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The economy added 254,000 jobs in September, and the unemployment rate fell to 4.1%. But the unemployment rate has risen from a recent low of 3.4%.
All economic data will be closely watched leading up to the election. Democrats and the Biden administration have worked to emphasize bright spots in the economy, such as robust economic output, while Republicans have blamed too-high inflation on the administration and, in turn, on Harris.