Soaring Rents, Food Costs Keep US Consumer Inflation a Front-Burner

September CPI rose 0.4% CPI 8.2% YoY Core CPI rose 0.6%; Up 6.6% YoY WASHINGTON, Oct. 13 (Reuters) – September US consumer prices rose more than expected, as rent and food costs soared the most since 1990, making the Fed fourth 75-next month interest rate hike. A report from the Labor Department on Thursday showed a baseline inflation measure that marks the largest annual increase in 40 years as consumers pay more for health care. “Following last week’s strong employment report, strong employment growth and unemployment fell to a pre-pandemic low of 3.5% in September,” Sal said. “One of the most aggressive tightening cycles in decades.” Guatieri, chief economist at Toronto BMO Capital Markets. Register now Register for unrestricted access to Reuters.com The CPI rose 0.4% last month after gaining 0.1% in August. Economists surveyed by Reuters expected the CPI to rise 0.2% Food prices rose 0.8% and the rise in all six major grocery store food groups increased the cost of food at home by 0.7% Owner’s Equivalent Rent is Measuring the amount homeowners can pay for rent or obtain by renting a property, it rose 0.8%, the biggest increase since June 1990. This staggering increase more than offset a 4.9% decline in gasoline prices. Gasoline prices likely bottomed last week after the Organization of Petroleum Exporting Countries (OPEC) and its allies decided to cut oil production.The Ukraine war also puts food prices at risk of rising, well above the Fed’s 2% target. Bullish high inflation poses a challenge for the US central bank as well as a blow to President Joe Biden and Democrats Hope to maintain control of Congress in next month’s elections In the 12 months leading up to September, the CPI rose 8.3% from August. The year-over-year CPI peaked at 9.1% in June, the biggest increase since November 1981. Financial markets suggest that the Fed will raise rates another 0.3 percentage points between November 1 and 2 The U.S. central bank raised its benchmark interest rate from near zero in March to the current 3.00-3.25% rate in March, according to CME’s FedWatch tool, according to minutes released on Wednesday. At the meeting of 20-21, policymakers said, “Inflationary pressures were expected to continue in the short term.” US stocks opened lower. year has risen. US Treasury prices fell. A woman shopping for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington DC, USA on August 19, 2022. REUTERS/Sarah Silbiger/File PhotoRead More September CPI rose 0.6% to coincide with August gains. The so-called core CPI is mainly driven by the high cost of rental accommodation. Health care costs are also under pressure, rising 0.8% as consumers pay more for doctor visits. New car prices rose 0.7% as supply remained tight. . Auto insurance costs more, just like furniture and operations, grooming, training, and airfare. However, clothing prices fell 0.3% and used car and truck prices fell for the third straight month. The core CPI rose 6.6% in the 12 months to September, the highest level since August 1982. September had the weakest figure for producer core commodity prices in nearly 2-1/2 years. However, the transition from producer to consumer inflation can take some time. A separate report from the Department of Labor on Thursday showed an increase in the number of new Americans filing for unemployment benefits last week, but this is most likely due to Hurricane Ian, which caused massive damage across Florida and Carolina in late September. Initial claims for state unemployment benefits closed at 199,662 seasonally adjusted to 228,000, up 9,000 for the week ended October 8. In Florida, 10,368 claims surged. In the aftermath of Hurricane Fiona, claims in Puerto Rico increased, while claims in New York increased significantly. On the last day of August, 1.7 jobs were created per unemployed person, and layoffs remained low. “The transition to a softer labor market is accompanied by an increase in the unemployment rate.” Register Now for Free Unlimited Access to Reuters.com Report by Lucia Mutikani; EDIT: Chizu Nomiyama and Paul SimaoOur Standard: Thomson Reuters Trust Principle.
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