US inflation pressures further intensified in Sept
Inflation in the United States accelerated in September, with the cost of housing and other necessities intensifying pressure on households, wiping out pay gains that many have received and ensuring that the Federal Reserve will keep raising interest rates aggressively. Consumer prices rose 8.2 percent in September compared with a year earlier, the government said on Thursday. On a month-to-month basis, prices increased 0.4 percent from August to September after having ticked up 0.1 percent from July to August. Yet excluding the volatile categories of food and energy, so-called core inflation jumped last month – a sign that the Fed’s five rate hikes this year have so far done little to cool inflation pressures. Core inflation climbed 0.6 percent from August to September and 6.6 percent over the past 12 months. The yearly core figure is the biggest increase in four decades. Core prices typically provide a clearer picture of underlying price trends. Thursday’s report represents the final US inflation figures before the November 8 midterm elections after a campaign season in which spiking prices have fueled public anxiety, with many Republicans casting blame on President Joe Biden and congressional Democrats. Inflation has swollen families’ grocery bills, rents and utility costs, among other expenses, causing hardships for many and deepening pessimism about the economy despite strong job growth and historically-low unemployment. The September inflation numbers are not likely to change the Fed’s plans to keep hiking rates aggressively in an effort to wrest inflation under control. The Fed has boosted its key short-term rate by 3 percentage points since March, the fastest pace of hikes since the early 1980s. Those increases are intended to raise borrowing costs for mortgages, auto loans and business loans and cool inflation by slowing the economy. Minutes from the Fed’s most recent meeting in late September showed that many policymakers have yet to see any progress in their fight against inflation. The officials projected that they would raise their benchmark rate by an additional 1.25 percentage points over their next two meetings in November and December. Doing so would put the Fed’s key rate at its highest level in 14 years. (AP)