Inflation, overall, is scaling back from a formerly torrid pace as prices at the pump recede.
But the fact remains that everyday essentials — namely food and clothing — are more expensive as of October.
The latest reading of the Consumer Price Index shows that the headline rate of inflation was unchanged in October, month over month, down from 0.4% in September.
The year-on-year increase now stands at 3.2%, down significantly from the 9% rate seen in June of 2022.
The individual categories detailed by the Labor Department Tuesday (Nov. 14) show some puts and takes. Gasoline prices were down 5% month on month, and prices are down 5.3% year on year.
Everyday Essentials Still Cost More
As a result, consumers may have a bit of extra “wiggle room” in the wallet to help pay for other, everyday essentials.
They need that wiggle room, it seems.
The same release shows that the prices paid for food consumed at home (read: groceries) were up 0.3% in October compared to September’s levels, up from previous rates in previous months that were flat to up 0.2%. Most categories of foodstuffs were more expensive, as the index for cereals and bakery products rose 4.2% over the 12 months ending in October. The dairy and related products index decreased 0.4% over the year. The remaining major grocery store food group indexes posted increases ranging from 0.4% to 3.6%, per the latest report.
Food away from home, consumed at restaurants and other establishments, was 0.4% more expensive in October, matching the monthly pace from September, and accelerating from a recent monthly low during the summer of 0.2% gains.
Clothing was up 0.1% in October over September, reversing September’s 0.8% decline. Apparel, overall, is 2.6% more expensive than last year. And shelter, which was up 0.3% in October, month on month, is 6.7% more expensive than 2022’s levels last fall.
The Read Across
Taken together, though the markets are cheering the headline numbers, and investors seem to be anticipating rate cuts from the Federal Reserve, the pressures of the paycheck-to-paycheck economy remain firmly in place.
Recent PYMNTS Intelligence data spotlighted the fact that inflation’s lingering impact has been significant, as roughly 8 out of 10 consumers have depleted their savings to pay their bills, and 12% have spent more than what they earned in the last six months. The middle-income segment — earning $50,000 to $100,000 annually and accounting for more than half of the population — has seen their readily available savings in real terms plummet by 18% in the last year, when accounting for inflation.
Only about a third of consumers expect to be able to pad their savings back up in the months ahead. And a whopping 85% of individuals we’ve surveyed have said that their incomes are not matching inflation, which we note would dampen any financial dry powder to keep spending.
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November 14, 2023 at 11:21PM
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Despite Inflation's Slowing Pace, Consumers Still Paying More for Groceries and Clothing - PYMNTS.com
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