The US Consumer Price Index (CPI) rose 0.6% in October 2023, the largest monthly increase since November 2020, as prices rose the most for energy products, transportation services, and housing, according to a report released by the Department of Labor.
CPI reached its highest level since April 2012, spurred on by a 5.5% increase in energy prices, which was nearly double the 2.8% growth rate in September. Transportation services rose 1.7% and housing expenses grew 0.4%. Other prices, such as food, clothing and medical costs, rose more modestly during the month.
The CPI is a measure of inflation, which is a rise in the prices of goods and services. The Federal Reserve targets inflation at 2%, which is seen as a sign of a healthy economy. If prices are rising too fast it can quickly lead to higher borrowing costs and squeeze consumer spending, which can adversely affect economic growth.
The October increase follows a 0.3% drop in September, and is the latest sign of an uptick in inflation. Average hourly wages rose 5.3% during the past 12-month period, which is the fastest rate since August 2020.