The American Institute for Economic Research Everyday Price Index (EPI) declined 0.20 percent to 289.0 in October 2024. This is the fourth monthly decline in our index since January 2024, the third consecutive decline, and the fourth time this year that our core CPI proxy and the EPI have diverged on a monthly basis.  

AIER Everyday Price Index vs. US Consumer Price Index (NSA, 1987 = 100)

Among the twenty-four EPI constituents eleven rose, one was unchanged, and twelve declined in October 2024. The top gaining price categories were food-away-from-home, food-at-home, and admissions to movies, theaters, and concerts. Motor fuel, internet services, and gardening/lawncare services led declines for the month.

On November 13, 2024, the US Bureau of Labor Statistics (BLS) released its October 2024 Consumer Price Index (CPI) data. The core month-to-month CPI number increased by 0.3 percent, which was in line with surveys. The month-to-month headline CPI number rose by 0.2, also in line with surveys.

Shelter index led gains in the overall index excluding food and energy, despite notable declines in gasoline and fuel oil prices. The energy index dropped 2.5 percent in October, driven by a 5.0 percent decrease in gasoline and a 0.8 percent drop in fuel oil, while natural gas rose 1.2 percent after a previous decline. Electricity increased by 0.3 percent, adding to a rise in September.

As was also reflected in the AIER Everyday Price Index, the CPI showed rising food prices with the food-at-home index up 0.3 percent and food-away-from-home up 0.4 percent: those included a 0.5-percent rise in limited-service meals and an 0.3 percent increase in full-service meals. Nonalcoholic beverages edged down by 0.1 percent while fruit and vegetable prices remained steady.

Outside of food and energy, the month-to-month index rose 0.2 percent. Motor vehicle insurance jumped 1.9 percent after a 1.3 percent increase in September. Medical care rose 0.3 percent amid a 1.1 percent rise in hospital service prices and an 0.8 percent increase in the prices of prescription drugs, although physician services dropped 1.0 percent. Other increases were seen in recreation, personal care, and apparel.

The index for used cars and trucks fell 0.8 percent, adding to September’s 2.5-percent drop, alongside communication and airline fares falling by 0.3 and 0.9 percent respectively. Household furnishings and new vehicles both dipped slightly by 0.1 percent.

October 2024 US CPI headline & core month-over-month (2014 – present)

On the year-over-year side, headline CPI rose 2.6 percent, meeting forecasts of a 2.6 percent increase. Year-over-year core CPI was also in accordance with forecasts, with the October 2023 to October 2024 rise coming in at 3.3 percent.

October 2024 US CPI headline & core year-over-year (2014 – present)

Over the past year, the food-at-home index rose 2.1 percent: cereals and bakery products were up 4.2 percent and dairy down slightly by 0.4 percent. Other grocery categories saw increases from 0.4 percent on the low side (meat, poultry, fish, and eggs) to as much as 3.6 percent (other food-at-home). Food-away-from-home increased 5.4 percent, driven by a 6.2 percent rise in limited-service meals and a 4.3 percent increase in full-service meals.

The energy index dropped 4.5 percent from October 2023 to October 2024 with declines in gasoline (-5.3 percent), natural gas (-15.8 percent), and fuel oil (-21.4 percent), though electricity rose by just under 2.5 percent.

Among year-over-year core prices, the all-items index increased 4.0 percent led by a 6.7 percent rise in shelter, which yet again contributed over 70 percent of this category’s increase. Other significant gains included motor vehicle insurance (+19.2 percent), personal care (+6.0 percent), recreation (+3.2 percent), and household furnishings (+1.7 percent).

Both the October 2024 CPI and EPI reflect a continuation of recent trends, with inflation neither accelerating nor cooling significantly faster. Disinflation in core goods appears to be stalling, but that appears to be primarily due to seasonal pressures in the used-car market. Nonetheless, broader goods disinflation remains widespread; and although there are anecdotes regarding firms raising prices in anticipation of new tariffs, there are currently few signs of preemptive business actions. 

Elevated inventories and higher interest rates on auto loans are likely to temper future price increases in vehicles, while other goods are also seeing little inflationary pressure. The October 2024 CPI release offers no indications that would deter the Federal Open Market Committee from a potential rate cut in December. The upcoming core Personal Consumption Expenditure (PCE) deflator data, however, which could be impacted by medical and financial services, might indicate persistent services inflation slightly above the Fed’s target. That would complicate the December rate decision.

The automobile sector may face seasonal headwinds in the coming months, slowing a further easing in core goods prices for the rest of the year. Elevated inventory-to-sales ratios and recent spikes in both Treasury yields and the US dollar, however, suggest that slowing disinflation is likely to be temporary; the customary holiday season discounting, in addition to compressed import prices, would further support that development. Also of note, the share of core spending categories experiencing outright deflation has risen slightly (currently 45 percent), showing a broad base for disinflation. 

Concerns remain that tariffs, especially those broadly applied, could reignite inflation. However, recent evidence suggests that targeted tariffs, such as those on specific imports from China, would impact corporate profits rather than sharply increase consumer inflation – at least initially. In total, today’s release supports the prospect of further accommodative measures.