October has brought the anticipation of the latest US inflation report, set to be released later this week. After a tumultuous summer, economists are expecting the report to show a decrease in economic growth, as consumer spending and business investments remain stagnated.
The US Bureau of Labor Statistics is scheduled to release its latest consumer price index on Friday. The index is a monthly measure of the prices of goods and services purchased by consumers and is widely used to gauge the direction of prices.
In the past month, the US economy has been hit by the impacts of the coronavirus pandemic, with unemployment rising to levels rarely seen before. The pandemic has also caused grocery prices and rent to skyrocket, resulting in overall inflation remaining high.
Economists are expecting the report to show that, despite these effects, inflation has declined. The consensus is that price increases will be muted in October when compared to September, with prices seeing an overall weakening instead of growth.
Experts attribute the expected slowdown to a decline in demand as consumers continue to be wary about spending in the current environment. Gasoline and medical care are two areas likely to experience decreased inflation this month, as more people stay home and less travel would naturally lead to less demand for fuel and medical treatments.
For businesses, the expectation is that the inflation rate will remain at the same level, or even slightly decrease, compared to previous months. This will give companies much needed breathing room, as they can focus on other aspects of their businesses while being insulated from significant increases in prices of their inputs.
It is expected that the inflation rate will remain fairly low in the coming months, as the US economy slowly begins to recover from the effects of the pandemic. The report from this month will be a critical indicator to gauge how far the US has to go until it returns to pre-pandemic levels.