U.S. consumer prices were unchanged in October, indicating the spike in inflation over the summer has receded amid a resurgence of the coronavirus pandemic.
The flat reading for last month followed four straight months of gains in the consumer price index as states lifted pandemic-related business closures and stay-at-home orders. The CPI rose 0.2% in September.
The Labor Department reported Thursday that slight increases in the cost of staples such as groceries and electricity in October were offset by price declines for gasoline, car insurance, clothing, home furnishings, and medical care.
The core consumer price index, which strips out oft-volatile energy and food prices, was also unchanged last month. Over the past year it has risen 1.6%, a tick down from the previous month, while overall inflation has climbed 1.2%.
“After several months of above-trend price gains, inflation pressures are now clearly reversing,” said chief economist Aneta Markowska of Jefferies LLC.
The COVID-19 resurgence that began in October has continued into November. “With the explosion in virus numbers putting downward pressure on demand in the short-term, we expect inflation to remain subdued for a while yet,” Michael Pearce, a senior economist at Capital Economics, said in a research note.
As prices declined steeply early in the pandemic and the economy tanked, the Federal Reserve cut a key interest rate to near zero. Inflation remains well below the Fed’s 2% target after hitting 2.3% before the pandemic.
“Central bankers have indicated they won’t raise rates again until inflation tops 2% for an extended period, an outcome that’s unlikely in the next year or so,” MarketWatch said.
Prices for dining out rose 0.3% last month, building on a 0.6% rise in September, but grocery prices were up slightly, by 0.1%, after large monthly gains earlier in the pandemic, when many Americans were staying at home. The cost of medical services fell 0.3%.