Inflation Persisted at Uncomfortable Levels In September


As the September rate reaches 8.2%, inflation continues to hold the U.S. economy captive.

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 inflation continued to batter Americans, reaching a 40-year high in August, according to data released on Thursday by the Labor Department. With the exception of volatile food and energy prices, core inflation, which measures typical price rises, increased 6.6% over the previous 12 months, marking its highest pace since 1982. What’s more concerning is that the monthly price change revealed increasing expense constraints. While core inflation rose at 0.6% in September, the same growth rate as in August, overall prices increased by 0.4%, quicker than in August.

Core inflation increased by 0.6% from one month to the next, which is one of the fastest rates so far this year. It also increased, to 6.6%, year over year, according to a research report by Cailin Birch, a global economist at Economist Intelligence Unit. According to the government, the cost of housing and healthcare increased, which led to price rises. Used car and clothing prices decreased.

“Food, housing, transportation, and health care services were major contributors to inflation. The owners’ equivalent rent index rose 0.8% over the course of the month, marking the biggest monthly growth for that indicator since June 1990, according to a note from Wall Street analyst Adam Crisafulli of Vital Knowledge. Prices continue to slow down, however slowly, as evidenced by the 8.2% increase in overall prices, including food and petrol, from a year ago. In comparison to the same period last year, the CPI increased by 8.5% in July and 8.3% in August.

Mortgage rates have reached a 16-year high as a result of the Federal Reserve’s quick rate increases, which have also contributed to the stock market’s decline to its lowest point since 2020. The Fed is trying to stop the fastest inflation in decades. Stocks fell after Thursday’s report, with the S&P 500 falling 1.2% and the Dow falling 0.7% in early trade as investors interpreted the inflation data to indicate that additional interest-rate increases were imminent.

The higher-than-expected September number “essentially guarantees the Fed will boost 75 basis points next month, and at least 50 in December,” wrote Robert Frick, corporate economist at Navy Federal Credit Union in a note. And since growing oil prices are likely to once again swing from decreasing to boosting inflation, we should be prepared for more bad news in October and November.

The rising cost of living continues to be a hardship for many Americans. According to a recent poll by The Associated Press-NORC Center for Public Affairs Research, 46% of respondents—up from 37% in March—said their personal financial status was poor. According to the study, only 36% of Americans think President Biden is handling the economy well, while 63% think he is not.

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