As the global economy continues to grapple with the impact of the coronavirus pandemic, prices have remained steady in October as inflation slowed further.
A report from the US Department of Labor showed that consumer prices were unchanged in October following a 0.2% drop in September. Inflation has been largely stable since the beginning of the year after an initial surge in March and April due to the pandemic.
The coronavirus pandemic has put downward pressure on prices, as demand has fallen for certain goods and services due to the lockdowns. The sharp spike in unemployment has also led to a decrease in discretionary spending, which has further weighed on prices.
The report also showed that gas prices, which surged in May, have since moderated. Energy prices fell by 0.5% in October, the seventh straight month of decline. Food prices, on the other hand, edged up by 0.2%.
Core inflation, which excludes volatile energy and food components, edged up by 0.1% in October, marking the fourth straight month of increase. This suggests that the deflationary impact of the pandemic on prices is slowly fading as the US economy slowly recovers.
The near-term outlook for prices remains uncertain. While inflation is expected to remain close to pre-pandemic levels over the next few months, a deeper economic downturn could still cause prices to fall. As the labor market continues to falter, consumers will be reluctant to spend and this could put further downward pressure on prices.
Overall, prices held steady in October as inflation slowed further. As the US economy attempts to recover, the near-term outlook for prices remains uncertain and will ultimately depend on the extent of the economic downturn.