Experts are anticipating that the October inflation report will show that price growth is slowly slowing down. According to the Wall Street Journal, the Consumer Price Index (CPI) is likely to fall around 0.3% in the month of October.
The slowdown in inflation can be attributed to a number of factors. For starters, the strong dollar has put downward pressure on the prices of imports. In addition, the hurricanes in the US have put extra strain on the economy, leading to a decrease in demand for goods.
Furthermore, wages have remained largely stagnant despite record-low unemployment, which also contributes to the slower rate of inflation. Analysts also point to several other factors, including the strong job market and reduced government regulation, as contributing to the shrinking of growth.
The expected slumped in the October inflation report could have a large effect on the markets. Traders and investors alike will be parsing the data closely to get an indication of the health of the US economy. In addition, it may create a temporary drag on the stock markets, as investors could react negatively to the slow growth.
Currently, the Federal Reserve is forecasting that the inflation rate for the next year will hover around 2% – a target that they have been consistently meeting since the Great Recession. But if the upcoming inflation report indicates lower than expected numbers, the Fed may have to consider adopting additional measures to stimulate the economy.
Overall, the economists are anticipating that the October inflation report will demonstrate a slower rate of price growth. The data will be closely observed by the markets, and could provide a glimpse into where the economy is headed.