Inflation accelerated in October, offering first look at prices since election

Consumer prices rose 2.6% in October compared to a year ago, ticking upward from the previous month and reversing some of the cooldown achieved in recent months, U.S. Bureau of Labor Statistics data on Wednesday showed. The fresh report matched economists' expectations.

The latest update offered a look at price increases little more than a week after the issue appeared to help former President Donald Trump win re-election. The data snapped a streak of six consecutive months of cooling inflation.

Core inflation -- a closely watched measure that strips out volatile food and energy prices -- increased 3.3% over the year ending in October, matching the previous month, the data showed.

Food prices climbed 2.1% over the year ending in October, marking a slower increase than the overall rate.

Prices fell over the past year for some common grocery items such as white bread, bacon and bananas. However, the price of eggs soared a staggering 30% over the previous year, owing primarily to an avian flu outbreak that has decimated supply.

Gasoline prices offered a bright spot in Wednesday's report, falling more than 12% over the year ending in October. Gasoline prices typically drop over the final months of the calendar year, since drivers reduce consumption after the busy summer traveling season.

Overall, inflation has cooled dramatically since a peak of 9% attained in 2022, now hovering near the Federal Reserve's target rate of 2%.

The slowdown of price increases has coincided with robust economic growth, establishing the twin conditions necessary for the U.S. to achieve a "soft landing."

Still, policymakers at the Fed forecast that inflation will inch downward toward normal levels next year, and reach the central bank's target rate in 2026, according to projections released in September.

The Fed cut interest rates by a quarter of a percentage point last week. The move came two months after the Fed cut its benchmark interest rate a half of a percentage point, dialing back its fight against inflation since it began in 2021.

The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, lower interest rates help stimulate economic activity and boost employment.

While the central bank's concern about inflation has receded in recent months, a renewed focus on the labor market has risen to the fore. Employment has continued to grow but expansion has slowed in recent months. The unemployment rate has ticked up from 3.7% to 4.1% this year.

"We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and labor market can be maintained with inflation moving sustainably down to 2%," Fed Chair Jerome Powell said at a press conference in Washington, D.C., last week.

Even as inflation has slowed, that progress hasn't reversed a leap in prices that dates back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed more than 20%.

The price hikes appeared to fuel support for Trump in last week's election. More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll.

However, Trump's proposals of heightened tariffs and the mass deportation of undocumented immigrants could rekindle rapid price increases, some experts previously told ABC News.

When asked last week about the Fed's potential response to Trump's policies, Powell said the central bank would make its decisions based on how any policy changes could impact the economy.

"In the near term, the election will have no effects on our policy decisions," Powell said on Thursday. "We don't know what the timing and substance of any policy changes will be. We therefore don't know what the effects on the economy will be."

"We don't guess, we don't speculate and we don't assume," Powell added.