Inflation Remains Steady in October

November 15, 2007 (Prices Byte)

Inflation Remains Steady in October

Prices Byte by Dean Baker

For Immediate Release: November 15, 2007
Contact: Alan Barber, (202) 293-5380 x115

“The price of Chinese imports has risen at a 3.2 percent annual rate since July."

The overall CPI rose by 0.3 percent in October, the same rate as in September. The core index rose by 0.2 percent for the fifth consecutive month. The annual rate of inflation in the core index over the last three months has been 2.1 percent, nearly identical to the 2.2 percent rate over the last year. The annual rate in the overall CPI has been just 1.7 percent over the last three months, compared to a 3.5 percent rate over the last year.

The difference between the overall inflation rate and the core rate in October was primarily attributable to a 1.4 percent increase in energy prices. Food prices increased 0.3 percent in October. They have increased at a 4.9 percent annual rate over the last quarter and are up 4.4 percent over the last year.

There were few obvious anomalies in either direction in the October report. Hotel prices fell by 1.5 percent in October, but this followed a 1.0 percent increase reported in September. Over the last quarter they have fallen at a 4.3 percent annual rate. This rate of price decline will not be sustained, but an enormous boom in hotel construction over the last two years is probably leading to some excess capacity and downward pressure on prices.