A drop in petrol prices last month helped to drive US inflation to the lowest rate since July.
Prices increased at a rate of 3.2 per cent over the 12 months to October, the Labor Department said. That was down from 3.7 per cent a month earlier.
Housing costs continued to climb, but overall price pressures were milder than analysts had expected, suggesting the country’s fight against inflation may nearly be over.
From September to October, the price index – which measures prices of a basket of items – was unchanged. Stripping out food and energy prices, which tend to fluctuate and mask wider trends, prices rose by 0.2 per cent, easing from a month earlier.
Stocks surged following the report, as investors bet the US central bank will not have to do more to cool the economy to slow inflation.
The Federal Reserve has already raised interest rates sharply since last year, aiming to stabilise prices that were soaring at the fastest pace in decades.
Analysts said the relatively mild price increases make the US central bank less likely to raise borrowing costs again.
