Inflation Is Reassuringly Low In October

By John S. McClenahen In dramatic contrast to its 0.5% increase in September, the U.S. Consumer Price Index (CPI) retreated to a more reassuring 0.2% in October. Lower energy costs are largely responsible for the lower rate of inflation. "We now have some pretty definite evidence that the inflation rate is moderating," says Gordon Richards, chief economist at the National Assn. of Manufacturers, Washington. "The 'core' CPI, which excludes the volatile food and energy components, also rose 0.2%, but this was down slightly from 0.3% in September," he notes. "Similarly, over the last three months, the core CPI rose at a 2.4% annualized rate, compared to 2.5% over the last 12 months." The U.S. Labor Dept.'s Bureau of Labor Statistics, which produces the CPI, offers a somewhat less sanguine picture, however. So far this year, the core CPI has advanced at a 2.7% rate, compared with only a 1.9% rise for all of last year, bureau data show. And during the first 10 months of 2000, the full CPI has risen at a 3.6% seasonally adjusted annual rate, compared with 2.7% for full-year 1999.

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