Inflation in services is also being fueled by steady consumer demand. “Services inflation is heavily influenced by wages, and so it is going to take a meaningful weakening of the labor market to bring inflation to heel.” “The primary driver of inflation has rotated away from goods prices and to services,” said Eric Winograd, U.S. The supply chains of many car parts are still disrupted. The cost of auto repairs surged 15% in September from a year earlier, also a record high. The cost of health insurance jumped 2.1% from August to September and more than 28% over the past 12 months - a record one-year increase. But declining house prices will take time to feed through into the government's measure. The Fed's rate hikes have led to much higher mortgage rates - the average on a 30-year fixed home loan is nearly 7% - and caused home sales to tumble and prices to falter. Yet the price drops were not as steep as many economists expected, and they were more than offset by sharp increases in services prices, including health care, auto repair and housing.Ī measure of housing costs jumped 0.8% in September, the largest such increase in 32 years. A key factor is that supply chain snarls have eased, and many large retailers such as WalMart and Target have discounted some items to clear excess stockpiles. 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.Įven with widespread price spikes, the September data showed that the prices for many physical goods, including clothing, used cars, furniture, and appliances, dropped last month. Thursday’s report represents the final U.S. The Dow Jones was up 560 points, or 1.9%, in mid-day trading. Stock markets fell sharply in early trading, but then rebounded and moved higher. “Let alone the clear and convincing evidence that the Fed is looking for.” “We still have no evidence that inflation is decelerating,” said Matthew Luzzetti, an economist at Deutsche Bank. Though cheaper gas helped slow the broadest measure of inflation, costlier food, medical care and housing pointed to the breadth of price pressures across the economy. But from August to September, prices increased 0.4%, faster than the July-to-August increase. Overall prices rose 8.2% in September compared with a year earlier, down slightly from August, the government said Thursday in its monthly inflation report. Core prices typically provide a clearer picture of underlying price trends. And on a month-to-month basis, such “core” prices soared 0.6% for a second straight time, defying expectations for a slowdown and signaling that the Fed's multiple rate hikes have yet to ease inflation pressures. WASHINGTON (AP) - Inflation in the United States accelerated in September, with the cost of housing and other necessities intensifying pressure on households, wiping out pay gains and ensuring that the Federal Reserve will keep raising interest rates aggressively.Ĭonsumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago - the fastest such pace in four decades.
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