US inflation cooled again last month, perhaps in a sign of a healthy economy world news

Measured monthly, consumer prices are expected to have risen a modest 0.1% between August and September, below the 0.2% increase in the previous month.

The improvement in inflation data follows a healthy jobs report released last week, which showed that hiring accelerated in September and the unemployment rate fell from 4.2% to 4.1%. The government also reported that the economy expanded at an annual rate of 3 percent in the April-June quarter. And growth will continue at roughly this pace in the recently concluded July-September quarter.

Lower inflation, steady hiring and solid growth could undermine former President Donald Trump's lead on the economy in the presidential campaign, as measured by opinion polls. In some polls, Vice President Kamala Harris even agreed with Trump on who would best manage the economy, after Trump decisively led President Joe Biden on this issue.

At the same time, most voters still give the economy relatively low marks, mainly due to inflation over the past three years.

As for the Fed, last week's jobs report, much stronger than expected, raised some concerns that the economy may not cool enough to slow inflation. The central bank last month cut its key rate by half a percentage point, the first rate cut of any size in four years. Fed policymakers have also indicated that they anticipate two additional rate cuts of 0.25 percentage points in November and December.

In comments this week, several Fed officials said they were still willing to cut their policy rates, but at the desired pace, another half-point cut was unlikely.

Laurie Logan, president of the Dallas branch of the Federal Reserve, said in a speech on Wednesday that the Fed should not rush to cut benchmark rates but should proceed slowly.

In the United States and many countries in Europe and Latin America, inflation has risen in the economic recovery from the pandemic, as Covid closes factories and paralyzes supply chains. Russia's aggression in Ukraine worsened fuel and food shortages, causing inflation to rise. It peaked at 9.1 percent in the United States in June 2022.

Excluding volatile food and energy costs, so-called core prices likely rose 0.3% from August to September, according to FactSet, and were likely 3.2% above the year-ago level. While those numbers are faster than the Fed's 2 percent target, economists expect underlying inflation to cool slightly by the end of the year as incomes and housing prices rise more slowly.

For example, economists at Goldman Sachs project that underlying inflation will fall to 3% by December 2024. Some analysts expect inflation to rise again unless the conflict in the Middle East escalates dramatically.

Although higher prices have hurt many Americans in the economy, wages and incomes are now rising faster than consumption and should make it easier for families to adjust. Last month, the Census Bureau reported that inflation-adjusted median household income — the level at which half of families are above and half are below — will rise 4 percent in 2023, enough to return incomes to their peak. pre-pandemic.

In response to rising food prices, many consumers have shifted their spending from name brands to store brands or started shopping more at discount stores. These changes have put more pressure on packaged food companies, for example, to slow their price increases.

This week, PepsiCo reported that its sales fell after imposing big price increases on its drinks and snacks.

Consumers are reevaluating standards, PepsiCo CEO Ramon LaGuerta said Tuesday.