International Desk: US consumer prices cooled in October but remained at decades-high levels, according to government data released Thursday, keeping the pressure on President Joe Biden as his Democratic party struggles to retain control of Congress.

The closely-watched report showed more evidence of rising costs, including a rebound in gasoline prices, in a year when surging inflation was at the top of voter concerns, and as Americans headed to the polls in this week’s midterm elections.

But there were positive signs in the closely-watched consumer price index (CPI), which showed annual inflation slowed to 7.7 percent in October, even while underscoring the heightened cost of living that has squeezed many households, the Labor Department reported.

That was the lowest annual increase since January, fueling hopes that soaring costs will start to pull back and causing Wall Street stocks to rally.

Biden welcomed the data, saying it showed “a much-needed break in inflation at the grocery store as we head into the holidays.”

But he cautioned in a statement that it will “take time to get inflation back to normal levels,” with potential setbacks along the way, and vowed to keep helping households with living costs.

While the annual inflation rate was down from a harsh 9.1 percent in June — the highest in 40 years — latest numbers are unlikely to bring quick reprieve from the Federal Reserve’s aggressive moves to cool the economy.

The Russia war in Ukraine has sent food and fuel prices soaring, and the energy index surged 17.6 percent over the past 12 months, according to the data.

Excluding volatile food and energy prices, “core” CPI rose 6.3 percent in October from a year ago, slightly below the rate in September.

– ‘Uncomfortably high’ –

As residents reel from soaring costs, the US central bank has moved forcefully to lower demand and bring prices down.

The Fed has raised the benchmark lending rate six times this year, including four consecutive giant rate hikes, despite fears it could trigger a recession.

Fed Chair Jerome Powell last week said it was premature to consider pausing the hikes, but there is a growing chorus of voices, including some Fed officials, advocating for smaller steps in coming months.

While headline data “surprised to the downside in October,” consumer prices “remain uncomfortably high,” said economist Rubeela Farooqi of High Frequency Economics.

Still, the numbers will be welcome news to Fed policymakers, with prices “finally showing some response” to the steep rate hikes, supporting a step-down in the pace moving forward, she said in an analysis.

Stephen Innes, managing partner at SPI Asset Management, said the inflation data “should mean the beginning of the end for inflation fears, and the Fed will feel much more comfortable ramping down” its policy moves.

Monthly CPI rose 0.4 percent in October, the same as in September, while the core rate slowed to 0.3 percent, half the pace of the prior month, the data showed.

Housing costs contributed to over half of the overall monthly increase in October, while the gasoline also resumed its upward move, the Labor Department said.

The energy index rose 1.8 percent in October, following three consecutive declines, including a 4.0 percent jump in gasoline.

But food prices, especially food at home, eased last month.

Ryan Sweet of Oxford Economics cautioned that the deceleration in the monthly CPI was likely affected by a methodology change in estimating health insurance prices, which created a “bigger drag” than expected.

But analysts are hopeful of some softening ahead as housing and other costs ease.

Ian Shepherdson of Pantheon Macroeconomics said “the fever appears to be breaking in rents” and this should gradually transmit to headline numbers.

US equities climbed in early trading on the numbers, with the Dow Jones Industrial Average, broad-based S&P 500 and tech-rich Nasdaq Composite Index all surging.

“One good core CPI print proves nothing, but we see good reasons to think this one is the real deal,” Shepherdson said.