Long past its painful peak, inflation in the United States may be heading steadily back toward its pre-pandemic levels, without the need for further interest rate hikes by the Federal Reserve.
Such a scenario became more likely, if hardly guaranteed, after Nov. 14’s surprisingly tame report on consumer prices for October. The Labor Department’s data showed a broad-based easing of inflation across most goods and services. The price of gas? Down. Appliances? Down. Autos? Down. Same for airfares, hotel rooms and doctors’ fees.
Overall inflation didn’t rise from September to October, the first time that consumer prices collectively haven’t budged from one month to another in more than a year. Compared with a year earlier, prices rose 3.2% in October, the smallest such rise since June, though still above the Fed’s 2% inflation target.
Excluding volatile food and energy prices, so-called core inflation was just 0.2% last month, slightly below the pace of the previous two months. Measured year over year, core prices rose 4% in October, down from 4.1% in September, the smallest rise in two years.
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“The inflation fever has broken,” said Bill Adams, chief economist at Comerica Bank. “Rising petroleum production is holding down gas prices, house prices are rising more slowly after mortgage rates surged in 2023 and rents are also rising more gradually” as more apartment buildings are completed.
October’s milder-than-expected price figures make it much less likely that the Fed will impose another rate hike. Many economists now say that the Fed’s most likely next move will be to cut rates, likely sometime next year, though that would depend on whether inflation continues to cool.
What’s driving inflation lower?
A major factor has been a big improvement in the supply of many things — workers, housing and components for manufactured goods.
Millions of Americans have come off the sidelines in the past year and flooded back into the workforce, seeking and (mostly) finding jobs. Immigration has increased, too, and with it more people looking for work. With more hires available, businesses haven’t had to raise wages as much to fill jobs, thereby easing the pressure on those businesses to raise their prices.
At the same time, the largest number of new apartment buildings nationwide in decades are being completed, a trend that is helping slow rent increases. Rental costs, after a spike in September, rose at a much more gradual pace last month.
Rents and other housing costs are likely to keep coming down, economists say, as the cost of new leases continues to fall, according to real-time data providers such as Zillow. Those lower prices show up in the government’s data with a lag.
And the supply chains that were badly snarled during the pandemic have pretty much unwound. An ample availability of products, parts and components help keep a lid on their prices. Automakers, for example, are having a much easier time finding semiconductors.
Partly as a result, new car prices declined last month, defying fears that the now-settled autoworkers’ strike would reduce dealers’ inventories and send prices higher. Used car prices, too, are down. They fell for a fifth straight month in October and have tumbled 7% from a year ago.
“We’re finally undoing that and getting the benefits,” Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said Tuesday in remarks at the Detroit Economic Club.
Separately, consumers are widely expected to pull back on spending after a blowout summer, with credit card debts — and delinquencies — rising and average savings falling. Cooler demand should force businesses to compete more on price.
Gas costs have kept falling this month, with the national average price at the pump averaging $3.35 Tuesday, down 42 cents from a year earlier. Those prices declines could push overall inflation, measured year-over-year, below 3% by December.
Aren’t things still pretty expensive?
Yes, inflation is still painfully apparent in many areas. They include auto and health insurance and some groceries, like beef and bread.
The average cost of auto insurance, which jumped 1.9% just from September to October, has soared nearly 20% from a year earlier. As new and used vehicles have grown more expensive, so has the cost of insuring them. And health insurance prices rose 1.1% last month, though that was largely due to a change in the government’s methodology.
But even as overall price increases slow, it doesn’t mean inflation is reversing or that most prices are falling back to pre-pandemic levels. The consumer price index, the most widely followed measure of inflation, remains about 20% higher than it was before the pandemic.
Milk prices, which have ticked down compared with the past year, are still 23% higher than they were pre-pandemic. Ground beef prices are 31% higher. Gas prices, despite a steep decline from a year ago, are still 46% higher than before the pandemic.
Many economists say a key reason why so many Americans hold a gloomy view of the economy despite very low unemployment and steady hiring is that these prices — on items that they buy regularly — remain much higher than they were three years ago.
Are paychecks keeping up?
Barring a deep and painful recession, prices aren’t going to fall to their pre-pandemic levels. Instead, economists say, Americans’ wages need to rise to help pay for the higher costs.
Wages and salaries trailed inflation in 2021 and 2022, exacerbating the pain of higher prices. Yet this year, as inflation has cooled, average pay has pulled ahead of inflation. By most measures, average paychecks, adjusted for inflation, are back to where they were before the pandemic.
Yet that essentially means that Americans, on average, have had scant real pay increases compared with three years ago. And while average pay may be back to pre-pandemic levels, many people have received below-average pay raises and are still behind inflation.
How might the Federal Reserve respond?
The Fed will likely welcome last Tuesday’s report as evidence of further progress toward getting inflation back to its target of 2%. Fed officials, led by Chair Jerome Powell, are considering whether their benchmark rate is high enough to quell inflation or if they need to impose another increase in coming months.
Powell said recently that Fed officials were “not confident” that rates were sufficiently high to tame inflation. The Fed has raised its benchmark interest rate 11 times in the past year and a half, to about 5.4%, the highest level in 22 years.
But the central bank has raised its key rate just once since May. Since its last meeting on Nov. 1, a government report showed that hiring cooled in October compared with September, and wage growth slowed, thereby easing pressure on companies to raise prices in the coming months.
Adams, the Comerica economist, said he thinks the Fed’s most likely next move will be to cut rates, likely by mid-2024.
The Fed’s rate hikes have increased the costs of mortgages, auto loans, credit cards and many forms of business borrowing, part of a concerted drive to slow growth and cool inflation pressures. The central bank is trying to achieve a “soft landing” — raising borrowing costs just enough to curb inflation without tipping the economy into a deep recession.
Said Eric Winograd, chief economist at AB Global, an asset management firm: “They look like they are on course to generate a soft landing. There’s no guarantee that they will actually manage to accomplish it. But right now, that’s the story that the data are telling.”
Prep Girls Basketball
Seeger at South Vermillion, 5 p.m.
Covington at Western Boone, 5:30 p.m. (varsity only)
Crawfordsville at Fountain Central, 5:30 p.m. (varsity only)
Urbana University High at Georgetown-Ridge Farm, 6 p.m.
Paris Thanksgiving Tournament: Champaign Central vs. Danville, 6:45 p.m.
Salt Fork at Gibson City-Melvin-Sibley, 7 p.m. (varsity only)
Prep Girls Swimming
Attica, Covington, Fountain Central and Parke Heritage at North Vermillion, 5 p.m.
Men’s College Basketball
Marquette at Illinois, 7 p.m.
Prep Girls Basketball
Timberwolf Tip-Off Classic at Cissna Park: Bismarck-Henning/Rossville-Alvin vs. Watseka, 6:30 p.m.
GCMS Tip-Off Tournament: Salt Fork vs. Paxton-Buckley-Loda, 7 p.m.
Men’s College Basketball
Rend Lake College at Danville Area Community College, 7 p.m.
Women’s College Basketball
St. Peter’s at Illinois, 11 a.m.
Franklin College JV at Danville Area Community College, 5 p.m.
ON THE AIR
Men’s College Basketball
Wisconsin at Providence, FS1, 5 p.m.
Duke vs. Michigan State, ESPN, 6 p.m.
St. Francis at Penn State, Big Ten Network, 6 p.m.
Marquette at Illinois, WDAN-AM 1490, WDNL-FM 102.1, FS1, 7 p.m.
Illinois-Chicago at Loyola (Chicago), NBC Sports Chicago, 7 p.m.
South Dakota at DePaul, FS2, 8 p.m.
Iowa at Creighton, FS1, 9 p.m.
National Hockey League
Tampa Bay Lighting at St. Louis Blues, Bally Sports Midwest, 7 p.m.
Men’s College Basketball
Merrimack at Ohio State, Big Ten Network, 6 p.m.
Eastern Illinois at Illinois State, Marquee Sports Network, 7 p.m.
Georgetown at Rutgers, FS1, 7:30 p.m.
Ohio State at Illinois, Big Ten Network, 8 p.m.
National Basketball Association
Orlando Magic at Chicago Bulls, NBC Sports Chicago, 7 p.m.
Note — some events are subject to blackout rules and regulations
Editor: Chad Dare (217) 477-5151
Reporter: Marvin Holman:(217) 477-5210
Note — The Commercial-News sports desk is staff Monday through Friday from 5 p.m. until 10 p.m. All results and information should be reported during those times.
CHAMPAIGN — It’s only the first week of the men’s college basketball season, but the Illinois Fighting Illini are already thinking about March and how they can be successful.
On a night when nothing came easy on the offensive end, the Illinois defense stood the challenge for the Oakland Golden Grizzlies in a 64-53 victory Friday night before 15,544 at the State Farm Center.
“On a night when we did make free throws, we didn’t make layups, we didn’t make dunks and we didn’t make 3s … it’s important to find a way to win a game when none of those things go your way,’’ said Illinois coach Brad Underwood. “It was really ugly and I love that. You wish you made a few, but we didn’t. You have to find a way to win ugly games. Tonight, we did that with an unbelievable defensive effort.’’
Illinois (2-0) shot a respectable 47 percent from the field (26-of-55), but the Illini were just 4-of-16 from 3-point range and 8-of-16 from the free-throw line.
Because of those shooting woes, the Illini found themselves trailing the Golden Grizzlies 45-42 with 10 minutes, 46 seconds left in the contest after a basket by Oakland’s Trey Townsend.
Over the next 16 possessions, the Golden Grizzlies managed just two 3-pointers and a conventional field goal as the Illini outscored them 22-8, including a 16-0 run fueled by six points from Quincy Guerrier, who recorded the 14th double-double of his career with 13 points and 10 rebounds.
“We were just locking up on defense, playing together and communicating,’’ said Guerrier, who became a father on Thursday. “My goal is find a way to help us win games.
“Defense is going to be a big key for us to win games. Like today, we were not shooting the ball well, free-throw percentage was terrible. So we have to find a way to win the games when shots are not falling.’’
Guerrier wasn’t the only Illinois player coming up big on both the defensive and offensive ends of the court.
Terrence Shannon Jr., who scored a team-high 15 points, was responsible for holding Oakland’s Jack Gohlke to six points on 2-of-6 from 3-point range. Gohlke had 18 points and 18 3-point attempts in the Grizzlies 79-73 loss to the Ohio State Buckeyes to open the season.
“This is a game that I stressed over a lot,’’ Underwood said. “Gohlke is a difficult defend because he’s always off the ball. It takes a lot of mental focus to handle that and I thought Terrence did a tremendous job.’’
Shannon admitted it was an all-around solid defensive performance by the Illini.
“We did a good job of grinding and defending,’’ he said. “Honestly, teams are going to score. We just stayed locked in and figured out our mistakes. Sticking to our principles and staying solid.’’
That defensive effort not only pleased Underwood, but Oakland coach Greg Kampe was also very impressed.
“Wow, they can guard,’’ he said. “I thought you saw two really, really good defensive teams. We guard goofy and they just go guard you. They took Gohlke and (Blake) Lampman out of the game.’’
In addition to his team-high 15 points, Shannon also dished out five assists and grabbed three steals. Sophomore Ty Rodgers had his third double-figure scoring game of his career with 10 points, while Dain Dainja also had 10 points to go with seven rebounds.
Up next No. 4 Marquette
The Illinois defensive mentality will face one of its biggest tests Tuesday night when the fourth-rated Marquette Golden Eagles come to the State Farm Center for a 7 p.m. contest as part of the Gavitt Games.
“It’s an unbelievable challenge, as I thought it was really going into the Oakland game,” Underwood said. “This is a team that has elite passing, and they’re an elite cutting team. So I think you can’t relax away from the ball. And I think those are two of the important things that we talked about.’’
Marquette (2-0) returns more than 80 percent of its scoring from a team that was a No. 2 in last year’s tournament.
The Golden Eagles backcourt duo of Kam Jones and Tyler Kolek are averaging 31.5 points per game, and last season they combined to score 28 points per contest.
Illinois figures to use Shannon on one of those guards as the senior has recorded five steals in the first two games this season.
“It’s a big reason that we’re as good as we are, is the job Terrence does defensively,” Underwood said. “His commitment level on that end is extremely high.”
Thousands of people pass by the Robert E. Jones Municipal Building on Main Street without giving much thought to who Robert E. Jones might be. Well, they should.
Jones helped lead a fundamental change in Danville’s city government, and helped the community recover from a significant economic loss in strong fashion.
Longtime city residents might remember Jones as the owner of the former Colonial Parkway restaurant or as the 40-year owner of the Dairy Queen on East Main Street. Others might recall the three terms he spent as Vermilion County treasurer.
Jones, who turns 85 this month, received the honor of having city hall named after him through his leadership as the city’s mayor for 16 years. City council members and the public deservedly honored Jones recently with an open house and presentation of a key to the city on Nov. 7.
Jones took over as mayor in 1987, the first mayor elected after a federal court mandated a change in the city’s government as a result of a civil rights lawsuit. The ruling abolished the commissioner positions that had controlled the city and instituted a mayor-aldermanic system that remains in place today.
Jones and members of his new city council had to navigate the change and uncertainty in the wake of the court ruling. As Jones recently told Bill Pickett on vermilioncountyfirst.com, “Well, I think our first term where we had a change in the form of government … all the aldermen worked together. … I think those were some trying times, but we got through them with everyone cooperating and working together.”
That ability to build a coalition among community leaders paid dividends for Jones when, within a decade of his taking the top job, the community suffered the blow of an announcement from General Motors that it would close the Tilton Foundry with its 1,000 or so jobs. Experts estimated the move would mean another 1,000 jobs lost from local companies that supplied and supported the foundry.
City and county officials worked together to combat rising unemployment rates and put together efforts to recruit new businesses, both industrial and retail. Jones likes to push credit for that success — attracting such community mainstays as McLane Midwest, Sygma, Fiberteq and AutoZone, among others, as well as retail development along North Vermilion from Liberty Lane to West Newell Road — to others. But without Jones leading the way for the city, and the residents he pledged to serve, the local economic scene would not be as robust as it is today.
Jones often worked behind the scenes, working to improve the community without thought to personal acclaim. Personal beliefs could be put aside for the greater good. The late Eugene “Radio” Thompson, who served on the city council when Jones was mayor and stood at the opposite end of the political spectrum, often talked about the two working together toward goals meant to benefit the entire community.
Jones always kept the goal of moving the community forward, of progress for as many people as possible, as his priority. His ability to build compromise, where both sides of an issue could see gains, is a skill far too few elected officials share today. He never claimed credit for successful projects, instead heaping praise on others. His satisfaction came from knowing his community was a better place.
Jones’ commitment to the city goes beyond politics. He helped create a dyslexia center housed in the Masonic Temple in 2008 and continues to support its efforts.
We add our good wishes as former Mayor Jones celebrates his 85th birthday. His legacy and its positive effect on the city he loves will continue for years and years to come. Happy birthday, Mayor Bob, and we hope you enjoy many more yet to come.
This week, the Community Colleges of Illinois launched a new brand campaign, For Every Student, For Every Community, to bring attention to the benefits and opportunities available in communities across the State through local community colleges. We want people to recognize the essential contributions of local community colleges that add up to a stronger and more competitive Illinois and a better quality of life for our citizens.
The message is based on five pillars that are shared by each of the 48 individual community colleges in Illinois. We are individuals with a shared purpose … to make the State of Illinois stronger and create a competitive workforce.
First, on our campuses, everyone belongs. We serve all students and strive to make our campuses welcoming to everyone.
The second pillar is that we are outcomes-driven. Illinois is No. 1 in the nation in terms of its community college students earning bachelor’s degrees and Illinois’ community colleges are the largest providers of workforce training in the State.
Pillar number three is that we open access to more rewarding futures. The State’s community colleges offer affordable tuition, financial aid counseling, faculty mentoring, comprehensive student success services, and flexible class schedules. Community Colleges educate 64 percent of the students enrolled in Illinois higher education institutions.
The fourth pillar speaks to our flexibility, innovation, and agility. We meet students where they are and make the most of their prior learning experiences. We deliver education that’s relevant to workforce needs in the community. We can ramp up and re-engineer programs to help local businesses remain competitive.
The fifth and final pillar is that we’re dedicated and accountable to our communities. We return your investment in us by boosting local education levels, developing new generations of leaders, and being a trusted, proactive partner in local economic development. We are resilient and we help to make resilient, responsible, contributing citizens from our students.
We are launching this new, collective brand message at the same time as most of the colleges are beginning registration for the upcoming spring semester. At Danville Area Community College, we’re offering an Early Bird incentive for those who choose a full-time class schedule for spring. For continuing students, those who have been with us during the fall semester, if you register by Dec. 1, you’ll be automatically entered into a drawing for an iPhone 15 Max Pro. New students who weren’t with us this fall have until December 20 to register. On Jan. 30, 2024, we will draw one name from the continuing student pool and one name from the new student pool, check to confirm that they are enrolled as full-time students, and award a phone to each of them. At last check, each phone is valued at $1,599.
If you are a current student at DACC, there is no reason not to enroll by December 1, and every reason to get in to see your advisor early. If you’ve been considering school, but putting it off, now is a great time to stick your toes in the water. Call it an early holiday gift to yourself. You could win the latest and greatest iPhone by simply choosing not to procrastinate this year.
Please remember that DACC, and all the other community colleges in the State of Illinois are here for every student and every community. We’re here to make life better for you. Now that’s something to be thankful for.
Possible development along U.S. 59 and Blue Creek Road has an El Campo landowner going before the Planning & Zoning Commission.
About 20 percent of the slightly more than 22-acre plot is already zoned for general commercial, but the rest has an industrial use designation.