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Prices Stayed Steady Amid Slowing Inflation in October

In October, the prices of goods and services were steady as ongoing inflation has slowed. According to research released by the Federal Reserve Board of Governors, core prices stood at 1.4% in October, the same rate reported in September. Though prices are currently stable, economic signals suggest that if the current trend continues we may eventually see a drop in prices. The consumer price index (CPI), which is used to measure inflation, has been decreasing since August due to decreased demand for goods. This decrease in consumer demand from both foreign and domestic markets is likely the main factor behind the slowing inflation rate. In addition to decreased demand, the current climate of trade tariffs and other political instability has reduced consumer confidence. This is evident in the overall growth of retail sales, which grew slower in October compared to the prior month. This reduced spending means there is less capital available to businesses and can have a reverberating effect if left unchecked. Despite this slowdown, the economy is still in a state of growth. Employment numbers remained at an all-time high with the unemployment rate holding at 3.5%, which is lower than the Federal Reserve’s target of 4.7%. This suggests that despite the decreased demand, there is still confidence from businesses that the overall economy will remain in a position of growth. The current prices indicate that the Federal Reserve’s rate cuts have been successful in holding inflation steady. This is beneficial for consumers, as prices on goods and services have remained consistent for the last several months. However, if we want to maintain steady prices, it is essential that confidence in the economy is restored, and Americans support businesses by continuing to buy goods and services.