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Here’s the inflation breakdown for October 2022 — in one chart

Published

2 years ago

November 10, 2022

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People shop for bread at a supermarket in Monterey Park, California on Oct. 19, 2022.

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Inflation was cooler than expected in October, although household staples such as shelter, food and energy remained among the largest contributors to consumer prices still rising at a historically fast pace, the U.S. Bureau of Labor Statistics said Thursday.

Inflation is a measure of how quickly the prices consumers pay for a broad range of goods and services are rising.

The consumer price index, a key inflation barometer, jumped by 7.7% in October relative to a year earlier — the smallest 12-month increase since January. Economists expected a 7.9% annual increase, according to Dow Jones. Basically, a basket of goods and services that cost $100 a year ago costs $107.70 today.

The annual rate is down from June’s 9.1% pandemic-era peak and September’s 8.2% reading, but is hovering near the highest levels since the early 1980s.

“That’s obviously still very high,” said Andrew Hunter, senior U.S. economist at Capital Economics, of October’s reading. “But at least it’s a move in the right direction.”

A decline in the annual inflation rate doesn’t mean prices fell for goods and services; it just means prices aren’t rising as quickly.

While the headline annual reading is generally easier for consumers to understand, the monthly change is a more accurate gauge of near-term trends, i.e., if inflation is speeding up or slowing down, economists said.

The CPI rose 0.4% from September, according to the BLS. Economists expected a 0.6% monthly increase.

“For the past year to 18 months, we’ve seen a lot of 0.4%, 0.5%, 0.6%,” Hunter said. “It’s the reason annual inflation has been so high.”

Consistent monthly readings in the 0.2% range would suggest inflation was under control, he said.

The ‘pervasiveness’ of price increases

A healthy economy experiences a small degree of inflation each year. U.S. Federal Reserve officials aim to keep inflation around 2% annually.

But prices started rising at an unusually fast pace starting in early 2021, following years of low inflation.

As the U.S. economy reopened, a supply-demand imbalance fueled inflation that was initially limited to items such as used cars, but which has since spread and lingered longer than many officials and economists had expected.

“That’s the crux of the problem: the pervasiveness of inflation,” said Greg McBride, chief financial analyst at Bankrate.

Inflation weighs on holiday gifting budgets

Inflation was a top concern for voters heading into Tuesday’s midterm elections. An NBC News poll issued last weekend found 81% of respondents were either somewhat dissatisfied or very dissatisfied with the state of the economy — a level unseen since the 2010 midterms.

The typical U.S. household spends $445 more a month to buy the same items it did a year ago, according to an estimate from Moody’s Analytics based on September’s CPI report.

Meanwhile, pay for many workers hasn’t kept pace with inflation, translating to a loss of purchasing power. Hourly earnings have fallen 2.8% in the last year after accounting for inflation, according to the BLS.

Food, energy and housing are top contributors

Large and consistent price increases in food, energy and housing have been troubling, despite some recent improvement, McBride said.

They’re necessities that constitute a large share of household spending, making inflation “so problematic” for households, he said.

“You can’t go without eating, you can’t go without cooking or heating the house and you need a roof over your head,” McBride said. “Those are three categories that continue to drive these high levels of inflation.”

Housing represents the biggest share of average consumer budgets, accounting for 34% of household spending in 2021, according to the most recent U.S. Department of Labor data. Transportation, which includes gasoline, and food are No. 2 and No. 3, respectively, at 16% and 12%.

Any meaningful relief for household budgets is something that is still well over the horizon.

Greg McBride

chief financial analyst at Bankrate

Shelter prices increased in October, jumping 0.8% from September — the largest monthly increase in that category since August 1990, according to the BLS. The category is up 6.9% in the last year.

The “food at home” index — or grocery prices — jumped 12.4% in October versus the same time a year ago. That’s an improvement from 13.5% in August, which was the largest 12-month increase in more than 40 years, since 1979.

The energy category — which includes gasoline, fuel oil, natural gas and electricity — was up 17.6% last month relative to October 2021. That’s a decline from September’s 19.8%.

“Any meaningful relief for household budgets is something that is still well over the horizon,” McBride said.

Gasoline prices had been a primary irritant for many Americans earlier in the year. Prices at the pump have retreated from summer highs of more than $5 a gallon nationwide, but edged up slightly in the past week; they currently sit at an average $3.80 per gallon, per AAA.

‘We have a ways to go’

“Core” inflation — a measure that strips out food and energy costs, which can be volatile — is important in terms of predicting future inflation trends, economists said.

The measure gives a sense of how broad-based inflation has gotten. Core inflation was 6.6% in September, the largest 12-month increase since August 1982. Core inflation was up 6.3% in October over a year ago; the index rose 0.3% during the month versus 0.6% in September.

Shelter, which includes rent, was the “dominant factor” in monthly increase in “core” CPI, according to the BLS. It accounted for 40% of annual core inflation.

The CPI generally lags price dynamics in the broad housing market and likely isn’t an accurate present-day snapshot of shelter prices, economists said. Home sales and mortgage volumes have slowed significantly, leading some to declare the U.S. is in a housing recession.

Other “notable” increases in the past year include medical care (up 5%), household furnishings and operations (8.4%), new vehicles (8.4%), and personal care (6.4%), the BLS said.

Monthly increases came from shelter, motor vehicle insurance, recreation, new vehicles and personal care, according to the BLS. There were also some monthly declines: used cars and trucks, medical care, apparel and airfares, it added.

“Price pressures remain evident across a broad range of goods and services,” Jerome Powell, chairman of the Federal Reserve, said during a press conference Nov. 2.

The central bank has been raising borrowing costs aggressively to cool the economy and reduce inflation. Powell signaled that policy would likely continue for the foreseeable future.

“I would also say it’s premature to discuss pausing [interest-rate increases],” Powell said. “And it’s not something that we’re thinking about; that’s really not a conversation to be had now.”

“We have a ways to go.”

Inflation isn’t just a U.S. phenomenon

Inflation isn’t a problem in just the U.S. Indeed, it’s been worse elsewhere.

For example, consumers in the United Kingdom saw prices increase 10.1% annually in September, tying a 40-year high hit in July.

But on the global stage, inflation first showed up in the U.S., Hunter said. That’s partly due to Covid-related restrictions unwinding sooner in many states relative to the rest of the world and federal support for households kickstarting the economic recovery.

“The U.S. has been a leading indicator for what’s happened to inflation in other countries,” Hunter said.

Inflation is a global problem worsened by geopolitical factors such as the ongoing Russian invasion of Ukraine. Pictured: damage in Donetsk, Ukraine, on Nov. 5, 2022, after shelling.

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Americans had more disposable income as the economy reopened, the result of federal funds such as stimulus checks and pent-up demand from staying at home. Meanwhile, Covid-19 lockdowns roiled global supply chains — meaning ample cash ran headlong into fewer goods to buy, driving up prices.

Those supply-chain issues are “only now beginning to unwind,” Hunter said. But higher labor costs — the result of ongoing worker shortages and wages that have risen near their fastest pace in decades — have led to upward pressure on the cost of services, too, he said.

Russia’s invasion of Ukraine also fueled a surge in commodity prices — for crude oil and grain, for example — which has fed into higher costs for gasoline and food, Hunter added.

High energy costs have broad ripple effects on other goods, which become more costly to produce and transport.

“I think this is something that will likely take much of 2023 to unfold, if we’re lucky,” McBride said.

Environment

Venmo revenue grows 20%, with debit card payment volume soaring

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4 hours ago

April 29, 2025

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Venmo revenue grows 20%, with debit card payment volume soaring

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Venmo, long a centerpiece of PayPal‘s growth story but often criticized for its lack of monetization, is becoming a bigger contributor to the business.

PayPal said Tuesday in its first-quarter earnings release that revenue at Venmo increased 20% year-over-year in the first quarter, though the company didn’t provide a dollar figure. PayPal acquired Venmo in 2013 through the acquisition of parent company Braintree.

While it’s long been a popular consumer service for sending money to friends, Venmo’s ability to drive meaningful revenue has been a major question mark for investors, especially as competition from rivals like Zelle and Square Cash has intensified.

Venmo’s total payment volume rose 10% from a year earlier, but revenue grew twice as fast, reflecting the business opportunity. Venmo only gets revenue from specific products like Pay with Venmo at online checkout, Venmo debit cards, and instant transfers, but not from peer-to-peer payments.

PayPal reports first-quarter earnings beat, maintains forecast

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4 hours ago

April 29, 2025

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PayPal reports first-quarter earnings beat, maintains forecast

CEO of PayPal Alex Chriss speaks during the Semafor 2025 World Economy Summit at Conrad Washington on April 24, 2025 in Washington, DC.

Alex Wong | Getty Images

PayPal reported better-than-expected earnings for the first quarter, but the company missed on revenue and reaffirmed its guidance for 2025 due to macro uncertainty. The stock fell about 2% in pre-market trading.

Here’s how the company did compared with Wall Street estimates, based on a survey of analysts by LSEG:

Earnings per share: $1.33, adjusted vs. $1.16 expected
Revenue: $7.79 billion vs. $7.85 billion expected

While sales increased just 1% from $7.7 billion a year earlier, PayPal said the results reflect a strategy to prioritize profitability over volume, rolling off lower-margin revenue streams.

Transaction margin dollars, the company’s key measure of profitability, grew 7% to $3.7 billion, marking the company’s fifth consecutive quarter of profitable growth under CEO Alex Chriss.

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PayPal shares are down 24% this year, while the Nasdaq has dropped 10%

Total payment volume, an indication of how digital payments are faring in the broader economy, missed estimates, coming in at $417.2 billion, versus the nearly $418 billion analysts projected. The number of active accounts rose 2% from a year earlier to 436 million.

Venmo revenue rose 20% year over year, though the company didn’t provide a dollar figure. Total payment volume for Venmo increased 10% to $75.9 billion. Pay with Venmo transaction volume climbed 50% in the quarter and Venmo debit card monthly active users increased by about 40%.

Chriss has focused on better monetizing key acquisitions like Braintree and Venmo. DoorDash, Starbucks and Ticketmaster are among businesses now accepting Venmo as one way that consumers can pay.

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Ahead of PayPal’s earnings report, some analysts had struck a cautious tone despite the company’s focus on margin expansion. Morgan Stanley analysts warned in a note on Monday that investor sentiment remained bearish due to the potential impact of tariffs, competitive pressure from Apple and Shopify, and the risk of a long-term slowdown in branded checkout growth.

Jefferies analysts highlighted PayPal’s China cross-border exposure as an emerging risk tied to potential new tariffs and changes to the de minimis exemption.

For the second quarter, PayPal issued better-than-expected guidance, forecasting adjusted earnings per share of $1.29 to $1.31, above the average analyst estimate of $1.21. Transaction margin dollars will increase 4% to 5% to between $3.75 billion and $3.8 billion, the company said.

However, for the full year, PayPal chose to reaffirm its guidance, citing “global macroeconomic uncertainty.” The company expects earnings per share of $4.95 to $5.10 for the year and free cash flow in the range of $6 billion to $7 billion.

PayPal shares are down 24% this year, while the Nasdaq has dropped 10%.

WATCH: PayPal’s crypto lead on allowing merchants to buy and sell virtual assets

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BP profit falls sharply but CEO says oil major ‘off to a great start’ in strategy reset

Published

9 hours ago

April 29, 2025

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BP profit falls sharply but CEO says oil major 'off to a great start' in strategy reset

British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.

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British oil giant BP on Tuesday posted slightly weaker-than-expected first-quarter net profit, following a recent strategic reset and a slump in crude prices.

The beleaguered oil and gas major posted underlying replacement cost profit, used as a proxy for net profit, of $1.38 billion for the first three months of the year. That missed analyst expectations of $1.6 billion, according to an LSEG-compiled consensus.

BP’s net profit had hit $2.7 billion a year earlier and $1.2 billion in the final three months of 2024.

The results come as the energy major faces fresh pressure from activist investors less than two months after announcing a strategic reset.

Seeking to rebuild investor confidence, BP in February pledged to slash renewable spending and boost annual expenditure on its core business of oil and gas.

BP CEO Murray Auchincloss told CNBC’s “Squawk Box Europe” on Tuesday that the firm was “off to a great start” in delivering on its strategic reset.

BP CEO Murray Auchincloss discusses first-quarter results

“We had a great operational quarter. We had our highest upstream operating efficiency in history. Our refineries in the first quarter ran at the best they’ve run in 24 years. We had six exploration discoveries in a row, which is really unusual and we started out three major projects,” Auchincloss said.

For the first quarter, BP announced a dividend per ordinary share of 8 cents and a share buyback of $750 million.

Net debt rose to $26.97 billion in the January-March period, up from $22.99 billion at the end of the fourth quarter. BP had previously warned of lower reported upstream production and higher net debt in the first quarter, when compared to the final three months of last year.

Shares of BP fell 3.3% on Tuesday morning. The firm is down roughly 8% year-to-date.

Activist pressure

BP’s green strategy U-turn does not appear to have gone far enough for the likes of activist investor Elliott Management, which went public last week with a stake of more than 5% in the London-listed firm.

The disclosure makes the U.S. hedge fund BP’s second-largest shareholder after BlackRock, the world’s largest asset manager, according to LSEG data.

Elliott was first reported to have assumed a position in the oil and gas company back in February, driving a share price rally amid expectations that its involvement could pressure BP to shift gears back toward its oil and gas businesses.

BP’s Auchincloss declined to comment on interactions with investors when asked whether the firm was under pressure from the likes of Elliott to go beyond the plans announced in its February pivot.

Notably, BP suffered a shareholder rebellion at its annual general meeting earlier this month. Almost a quarter (24.3%) of investors voted against the re-election of outgoing Chair Helge Lund, a symbolic result that reflected a sense of deep frustration among the firm’s shareholders.

Mark van Baal, founder of Dutch activist investor Follow This, told CNBC last week that he hoped the shareholder revolt means Amanda Blanc, who is leading the process to find Lund’s successor, will look for a new chair who is “climate competent” and “will not respond to short-term activists so quickly.”

Lund is expected to step down from his role next year.

Takeover candidate

BP’s underperformance relative to industry peers such as Exxon Mobil, Chevron and Shell has thrust the energy major into the spotlight as a prime takeover candidate. Energy analysts have questioned, however, whether any of the likeliest suitors will rise to the occasion.

BP’s Auchincloss on Tuesday said that he wouldn’t speculate on whether the company is a takeover target, but confirmed the oil major had not asked for any sort of protection from the British government.

“What I will say is we’re a strong, independent company and we’ve got sector-leading growth. And if we can deliver the sector-leading growth, and the first quarter is a fantastic example of that, then I have no concerns. I think we’re going to do great,” Auchincloss said.

Murray Auchincloss, chief executive officer of BP, during the “CERAWeek by S&P Global” conference in Houston, Texas, on March 11, 2025.

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Oil prices have fallen in recent months on demand fears. International benchmark Brent crude futures with June delivery traded at $65.19 per barrel on Tuesday morning, down more than 1% for the session. That’s lower from around $84 per barrel a year ago.

Asked whether weaker crude prices could put the some of the firm’s reset plans in jeopardy, Auchincloss said, “Not really. We have a balance of products that we think about that generate revenue for us. So, oil, natural gas and refined products as well.”

— CNBC’s Ruxandra Iordache contributed to this report.