US inflation fell again last month, perhaps a sign of a healthy global news economy

Measured month-on-month, consumer prices are expected to increase by a modest 0.1 percent from August to September, compared with a 0.2 percent increase in the previous month.

The improving inflation data follows last week's mostly good jobs report, which showed employment rose in September and the unemployment rate fell to 4.1% from 4.2%. The government also said the economy grew at an annual rate of 3% in the April-June quarter. Growth will continue at around this pace in the recently concluded July-September quarter.

Lower inflation, steady employment and solid growth could erode former President Donald Trump's lead over the economy in the presidential campaign, as measured in polls. Some polls even put Vice President Kamala Harris ahead of Trump on who best manages the economy, after Trump clearly led President Joe Biden on the issue.

At the same time, most voters still rate the economy relatively poorly, mainly due to inflation over the last three years.

As for the Fed, last week's jobs report, which was much better than expected, raised some concerns that the economy may not cool enough to slow inflation sufficiently. Last month, the central bank cut its key interest rate by more than half a point, the first major cut in four years. Fed policymakers also indicated they anticipate two additional quarter-point rate cuts in November and December.

In comments this week, several Fed officials said they remain willing to cut their policy rates, but at the desired rate another half-point cut is unlikely.

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

Inflation has risen in the United States and many countries in Europe and Latin America as the economy recovers from the pandemic as Covid closes factories and paralyzes supply chains. Russia's aggression against Ukraine has deepened fuel and food shortages, increasing inflation. In June 2022, it peaked at 9.1% in the United States.

Excluding variable food and energy costs, the so-called Core prices likely rose 0.3 percent from August to September and were likely 3.2 percent higher than year-ago levels. While those numbers would be above the Fed's 2% target, economists expect core inflation to cool slightly by the end of the year as rent and home price growth slows.

For example, economists at Goldman Sachs forecast that core inflation will fall to 3 percent by December 2024. Some analysts expect inflation to rise again unless the conflict in the Middle East worsens dramatically.

While higher prices have hurt the economy for many Americans, wages and incomes are now rising faster than consumption, which 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 households are above and half below – will increase by 4 percent in 2023, enough to return to its pre-pandemic peak. .

In response to higher food prices, many consumers shifted their spending from branded brands to private labels or began shopping more often in discount stores. These changes put more pressure on packaged food companies, for example, to slow price increases.

This week, PepsiCo said its sales fell after it imposed steep price increases on drinks and snacks.

Consumers are reassessing patterns, PepsiCo CEO Ramon LaGuerta said Tuesday.