A MARTÍNEZ, HOST:
With Thanksgiving round the corner, here's something to be thankful for - inflation, it's coming down. The latest cost of living report from the Labor Department this morning shows lower annual inflation in October than the month before. Now, falling gasoline prices get a lot of the credit for that, but other prices have remained stubbornly high. NPR's Scott Horsley joins us now. Scott, a lot of people at the supermarket yesterday, assuming there's going to be a lot today as we get closer to Thanksgiving. What kind of prices can they expect at the checkout line?
SCOTT HORSLEY, BYLINE: Yeah, A, it's really a mixed basket, but the centerpiece on a lot of Thanksgiving tables could be a relative bargain this year. Wholesale turkey prices have tumbled almost 30% from a year ago. Michael Swanson, who's a food economist at Wells Fargo, says even though turkey producers had to pay a lot for the corn and soybeans they feed those birds, they did not hold back, so there is a lot of poultry in the pipeline.
MICHAEL SWANSON: All of them put a lot more birds in the barn, and they're heavier birds. So there's a lot of turkey available right now and they just have to price it down to move it.
HORSLEY: A lot of grocery stores discount turkey anyway just to get shoppers in the door. Other Thanksgiving staples, however, could be more expensive this year. Canned pumpkin prices are up pretty sharply from a year ago. Canned cranberry prices are also up, although fresh cranberry prices are down for some reason. We always say, you know, food and energy prices bounce up and down a lot, so that's certainly been on display this fall.
MARTÍNEZ: Yeah, absolutely. Now, in California - aside from California, because that's where gas is still five bucks a gallon, around the nation it seems like gas prices are actually pretty good.
HORSLEY: Yeah, gas prices have fallen sharply, and that's a big reason the annual inflation number fell in October to 3.2% from 3.7% the month before. AAA says the average price of gasoline nationwide is down about 40 cents a gallon from a year ago, so good news if you're planning a Thanksgiving road trip. There are now about a dozen states where the average price is under $3 a gallon. Obviously, California is not one of them.
MARTÍNEZ: (Laughter) Jeez.
HORSLEY: Lower gas prices helped to offset rising rents last month. We also saw lower prices for airfares, hotel rooms and new and used cars, while the prices of medical care and auto insurance were higher. You know, so-called core inflation, which strips out those bouncy food and energy prices, was also lower than the month before and lower than a lot of forecasters had expected.
MARTÍNEZ: And the Federal Reserve has had an ongoing battle to bring down inflation. What does all that mean for that?
HORSLEY: Yeah, it likely means the Fed is not going to have any reason to raise interest rates next month. Investors were already betting the Fed would keep rates steady at its December meeting, and that's contributed to a rebound in the stock market these last couple of weeks. You know, inflation has come down a lot from a four-decade high last summer, although it is still not all the way back to the Fed's target rate, which is 2%.
MARTÍNEZ: The thing is, though, lots of people are still unhappy about inflation even though it's come down from its peak, so what's going on there?
HORSLEY: One thing Fed officials have been pointing out lately is that even when inflation is truly tamed - and we're not there yet - that doesn't necessarily mean prices go back to where they were when this all started. You know, if that's what you're hoping for, Federal Reserve Governor Chris Waller says you're likely to be disappointed.
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CHRISTOPHER WALLER: People have in their mind right now is, I want prices to go back to where they were in 2021. That's not going to happen. These prices are probably there forever.
HORSLEY: We have seen some actual price declines for things like gasoline and eggs, for example. In general, though, the Federal Reserve's goal is just to slow the increase in prices to a level that inflation is not something we all have to worry very much about.
MARTÍNEZ: All right. NPR's Scott Horsley. Thanks, Scott.
HORSLEY: You're welcome.
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