After rising and then moving sideways in recent months, inflation emphatically resumed its descent in October.

Consumer price increases eased more than expected as falling gasoline and used car prices offset another rise in rent and a rebound in health insurance costs.

An underlying measure of price increases that the Federal Reserve watches more closely stayed elevated but also pulled back, bolstering the case for the Fed to continue to hold rates steady after a flurry of aggressive hikes.

Consumer prices overall rose 3.2% from a year earlier, down from 3.7% in September, according to the Labor Department’s consumer price index. That pulled inflation closer to the more than two-year low it reached in June and July, before a surge in gasoline prices. On a monthly basis, prices were unchanged following a 0.4% rise the previous month.

The developments at least raise the prospect of some longer-lasting relief for Americans who have struggled to keep pace with rapidly rising prices triggered by pandemic-related supply chain troubles and consumer demand surges for more than two years.

"October’s report had good news for both winning the long-term inflation fight and easing some short-term pain," says corporate economist Robert Frick of Navy Federal Credit Union.

What is core inflation right now?

Core prices, which strip out volatile food and energy items and which the Fed follows more closely, rose 0.2% after 0.3% bumps the previous two months. The advance pushed the annual increase to 4% from 4.1% in September, the lowest since September 2021.

How is the S&P 500 stock index reacting to inflation?

Investors welcomed the encouraging report. The Dow Jones industrial averaged soared 465 points, or 1.4%, in midday trading to 34,798. And the S&P 500 index rose 1.7% to 4,488.

How is the 10-year Treasury yield responding to the news?

The yield on the 10-year Treasury tumbled to 4.46% from 4.64% late Monday. That’s a significant move for the bond market. Just a few weeks ago, the 10-year yield was above 5% and at its highest level since 2007. Bond yields and prices move in opposite directions.

How long will it take for inflation to go back to normal?

Since reaching a 40-year high of 9.1% in June 2022, inflation has come down substantially but remained stubbornly high in recent months.Prices for goods such as used cars and furniture have dropped as pandemic-related supply-chain snarls have unwound. But the cost of services such as rent, car repairs and auto insurance, have continued to edge higher in part because of swiftly rising employee wages tied to labor shortages. Last month, however, inflation slowed more dramatically.

Driving down inflation to the Fed’s 2% goal is still becoming more challenging than it was several months ago amid a healthy economy and job market, says economist Michael Pearce of Oxford Economics.

Will the Fed raise interest rates again?

Barclays expects the Fed to raise its key interest rate once more in early 2024, by a quarter percentage point, after hoisting it by 5.25 points in 16 months.

But other economists say inflation's drop last month, along with falling wholesale costs and a cooling job market will trigger a faster pullback in inflation, prompting the Fed to stand pat.

"We continue to expect a further decline in inflation over the coming months, which will bring interest rate cuts onto the agenda before long," says economist Andrew Hunter of Capital Economics.

Why are gas prices falling?

Gasoline prices dropped 5% in October after rising 2.1% the previous month and they’re down 5.3% from a year earlier. Pump prices are well below their $5 peak in summer 2022 but surged in August on higher oil prices amid a brighter global outlook and OPEC production cuts.

Recently, gas prices have fallen as the busy summer driving season ended and refiners began using cheaper winter gasoline blends. Regular unleaded prices averaged $3.36 nationally Monday, down from $3.63 a month ago, according to AAA.

In the months ahead, however, lean oil supplies and healthy demand could drive pump costs higher, Barclays says.

Will grocery prices go down?

Grocery prices rose 0.3% after two months of more modest increases but that still lowered the yearly advance to 2.1%. The cost of commodities such as wheat and corn generally have come down this year as major producers Ukraine and Russia have found alternative shipping routes that skirt their 18-month war. But severe weather has disrupted supplies recently.

Last month, the price of several proteins jumped. Uncooked ground beef was up 1.5%; bacon, 1.8%; and chicken, 0.3%. Breakfast cereal was up 0.6% and bread leaped 1%.

Some staples provided consumers some relief. Rice prices declined 0.9%, fresh fish and seafood dipped 0.1%, and cookies fell 1.1%.

Why are rents going up so much?

Rent continued to serve as the most stubborn hurdle to reining in inflation, rising a sturdy 0.5% for the third straight month, though that’s down from a spate of stronger gains. That nudged down the yearly rise to 7.2%. Economists expect rent increases to pull back, based on new leases, but that shift has been slow to filter through to existing leases.

The price of other services kept rising, with car insurance up 1.9%, auto repairs, up 0.2% and medical care services up 0.3% for a second straight month. But hotel rates fell 2.5%, partly offsetting a 3.7% rise the prior month, and air fares declined nearly 1% on lower jet fuel costs.

Goods prices continued to generally head lower. Used car prices dipped 0.8% after a 2.5% decline in September. Appliance costs dropped 1.2% and apparel ticked up just 0.1%.

Are health insurance premiums rising or falling?

Health insurance costs rose 1.1%, reversing steady declines that have left prices 34% lower than they were a year ago. Insurance rates are difficult to measure because of widely varying plans and so Labor bases its calculation on insurance company profits. Those tumbled in 2021 as Americans resumed medical procedures they had deferred during the pandemic, narrowing insurance firms’ net income.

Starting last month, though, officials began relying on the companies’ 2022 profits, which swelled as medical procedures returned closer to normal. As a result, insurance costs are expected to contribute to inflation as measured by the CPI over the next year.

More on inflation

For more questions and answers about inflation, keep reading.

Current inflation rate

Consumer prices increased 3.2% in October as compared to the previous year, according to the Labor Department’s consumer price index released Tuesday morning. The lower than expected rate showed inflation is edging towards the more than two-year low seen this summer before gas prices spiked. From month to month, overall prices rose 0.4% in October, the same uptick as September.

What time did CPI come out?

The October CPI report was released at 8:30 AM ET, Tuesday, November 14.

What is a depression vs. recession?

Unfortunately, there isn’t a set answer.

A recession is typically described by economists as a major decline in economic activity that lasts more than a few months. Usually, the downturn shows up in real GDP, real income, industrial production, the labor market and wholesale-retail sales, and is deemed a recession when there are two consecutive quarters of negative GDP growth.

Meanwhile, there’s no set definition for an economic depression, although it’s usually the term applied to a severe recession.

What is inflation?

Inflation is a "generalized rise in prices," says Josh Bivens, director of research at the Economic Policy Institute, a left-leaning think tank headquartered in Washington D.C. The cost of items and services ranging from groceries, to health care, to gas can rise and dip depending on inflation.

New inflation tax brackets

Inflation may impact what tax bracket you fall into.

The Internal Revenue Service said in its yearly inflation adjustments report that there will be a 5.4% increase in income thresholds to reach each new tier in the 2024/25 tax season.

Next year, the lowest rate of 10% will apply to individuals with taxable income up to $11,600 and joint filers up to $23,200. The highest rate of 37% will apply to individuals making more than $609,350, and married couples filing jointly who earn $731,200 or more.

The IRS makes these tweaks every year, relying on a formula pegged to the consumer price index in order to deal with inflation and to stave off "bracket creep," which occurs when inflation moves taxpayers into a higher bracket though they’re not experiencing any real uptick in earnings or buying power.

Next year’s increase is below last year's 7% bump, but far more than recent years when inflation was lower than the 3.7% annual inflation rate U.S. consumers experienced in September.

Cruise lines, too, are raising gratuity rates

Several major cruise lines have raised their gratuity prices in recent months, partly because of inflation. Royal Caribbean International began charging passengers $18 per guest, per day for non-suite staterooms Saturday, up from $16. Passengers in suites will pay $20.50, up from $18.50. The hikes follow similar moves from other cruise lines this year.

Inflation is prompting more Americans to take multiple jobs

The number of Americans working two or more jobs has reached its highest level since the pandemic’s start, a trend that suggests more of us are feeling inflation’s pinch.

Nearly 8.4 million people held multiple jobs in October, the Labor Department reported this month. They represent 5.2% of the workforce, the largest share of moonlighters since January 2020. Experts say people may be taking on extra work in response to inflation, which has outpaced wage growth through much of the past two years.

Inflation will blunt Social Security COLA boost in 2024

Inflation will more or less cancel out the annual cost-of-living adjustment (or COLA) in Social Security checks, seniors say, leaving many families struggling to keep up. Starting in January, more than 66 million beneficiaries will receive 3.2% more in their monthly checks, a bump that averages about $50.

COLA is meant to help Americans keep pace with inflation and maintain their standard of living. But many seniors say the Social Security hikes are falling short. For older adults, the biggest expense is health care.

Businesses are pressing for more tips to counter inflation

Tipping requests have exploded in the past couple of years, and inflation is one reason. After more than two years of rising consumer prices, businesses are feeling squeezed and looking to pass on expenses by requesting more tips for staff, experts say.

“Tipflation” takes many forms. Businesses prompt customers to leave large tips on checkout screens, or press for a tip on a takeout order. They may also calculate a tip on the after-tax amount, instead of the pretax total, or suggest a tip after adding an automatic gratuity to the bill.

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This article originally appeared on USA TODAY: CPI 2023 October: Inflation eased on lower gas prices.