The latest indication that the nation’s long-term inflationary pressures may be reducing as the economy slows and consumers become more cautious is the moderation of price rises in the United States last month.

According to data released by the Labor Department on Thursday, consumer inflation inched up 0.4 percent from September to 7.7 percent in October. The increase from the previous year was the smallest since January. When volatile costs for food and energy are excluded, “core” inflation increased by 6.3 percent over the past year and by 0.3 percent from September.

All of the figures came in below what economists had predicted.

The Federal Reserve is expected to continue raising interest rates despite the inflation’s hesitant lowering from last month in an effort to stop persistently excessive price increases. However, many analysts caution that if the Fed keeps aggressively tightening lending, it’s likely to trigger a recession by the following year.

The chance that unacceptably high borrowing rates — for mortgages, auto purchases, and other high-cost necessities — would send the largest economy in the world into recession has increased as a result of the Fed raising its benchmark interest rate six times this year in substantial increments.

In the recently concluded midterm congressional elections, inflation was a topic on many voters’ concerns. Though Republicans did not achieve the enormous political gains that many had anticipated, their economic concerns contributed to the loss of Democratic seats in the House of Representatives.

Even before Thursday’s numbers, some gauges of inflation had started to decline, and this trend may continue in the months to come. The majority of measures of worker wages, for instance, indicate that the significant pay rises of the previous 18 months have levelled off and started to decline. Although worker pay is not the main cause of rising prices, it can exacerbate inflationary pressures if businesses use higher customer prices to cover greater labour costs.

Supply chain snarls have mostly cleared up, with the exception of automakers, who are still having trouble finding the computer chips they require. The price of shipping has returned to pre-pandemic levels. The port of Los Angeles and Long Beach are now free of the backlog of cargo ships.

Additionally, this factor should lower inflation as the drop in new rents that has been observed in real-time measures from sources like ApartmentList and Zillow starts to be reflected in the government’s upcoming measures.

The labour market in the country has remained strong despite widespread concerns that the economy would enter a recession next year. The average number of jobs added by employers each month is a robust 407,000, and the unemployment rate is only 3.7 percent, which is very close to a half-century low. The number of available positions is still at an all-time high.

However, the American home market has suffered significantly as a result of the Fed’s rate increases. Over the past year, the average interest rate for a 30-year fixed mortgage has more than quadrupled, peaking at 7 percent before declining somewhat last week. As a result, housing investment fell by 26 percent annually in the quarter between July and September.

Sales have been impacted by rising mortgage rates. Home prices have started to decline on a monthly basis and are slowing down significantly compared to a year ago. A new apartment lease is also becoming less expensive.

However, economists believe that the price of housing may have increased in October and increased broader inflation measures because of how the government determines housing costs. The cost of all rents, including the majority of rents owed under existing leases, is calculated by the government. However, asking rents for new leases are gradually falling.

And economists anticipate a decline in prices for many important goods. It is anticipated that used car prices will have decreased between September and October after rising prices for new cars due to computer chip shortages last year. Although used-car wholesale costs have steadily decreased, retail prices have not yet fully reflected these reductions.