Holiday shoppers will be rejoicing in the coming weeks. Why? As they make their way to big-box retail stores to purchase gifts for friends and family for the 2022 holiday season, they will realize the prices of the goods they are purchasing are less expensive than in June.
We’ve all been waiting for deflation, and here it is.
What Happened: Thursday’s issuance of consumer price index (CPI) data by the U.S. Bureau of Labor Statistics gave investors (and consumers) a sigh of relief when it was discovered that top-line inflation rose 7.7% year-over-year, down from the 9.1% in June, a sign that the Federal Reserve’s journey to bring down historic inflation is working.
As predicted, headline inflation increased by 0.4% in October. Core inflation, which excludes volatile food and energy costs and may be more significant to the Fed, surprised by growing by 0.3% in October rather than by the expected 0.5% increase.
And, holiday shoppers, this one is for you.
The goods category, which accounts for 14% of the core basket and 11% of the Fed’s inflation basket, decreased by 0.4% from one month to the next, with greater deflationary pressure on the items within the category.
Why It Matters: During the COVID-19 pandemic, businesses scrambled to buy up much more merchandise than usual. The demand from customers who had a lot of savings and stimulus money from earlier in the pandemic had caused inventories to rise to historic levels, retailers have been telling investors.
The stockpiling didn’t work; according to economists, rising prices and inflation have discouraged consumers from making large purchases.
As a result, Walmart Inc WMT, Amazon.com, Inc. AMZN and other retailers are offering discounts and fresh campaigns to move the extra merchandise, a boon for the holiday shopper.
Photo: imtmphoto via Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.