Skip to main content
Business

Wrong direction: Inflation still breaking records, core prices at 4-decade high

Share

September consumer prices soared higher than expected, rising 0.4% on the month, the fastest pace since June. Overall annual inflation hit 8.2% in September, a hair lower than August’s 8.3% but a tick higher than the 8.1% economists expected.

Months ago, food and energy was blamed for much of inflation, but September’s figures from the Bureau of Labor Statistics tell an alarming story. While energy prices continue to ease and food inflation holds steady, core consumer prices are on the rise. Stripping out food and energy, core inflation in September was at 6.6%, the largest annual price increase in four decades.

The shelter index is helping drive that. It’s also up 6.6% and carries heavy weight in the consumer price index. BLS said the rent index rose 0.8% the month of September.

A few areas did see price declines. Energy prices continue to ease, the index down 2.1% on the month, but still up 19.8% on the year. Used cars also saw the third straight month of declines, down 1.1% in September. Apparel and prescription drugs were also down slightly, at 0.3% and 0.1% respectively.

Inflation is proving stubborn in spite of monetary squeezes by the Federal Reserve, which is expected to continue aggressively hiking rates through early next year. Analysts say the September data makes certain the Fed will raise its target rate by another 0.75% at its next meeting. Stocks opened dramatically lower Thursday morning as investors digested the latest data.

Increases in the federal funds rate have substantially impacted the housing industry this year. According to a lender survey by Freddie Mac, the average 30-year fixed mortgage is now at 6.92%, the highest rate in two decades. A year ago, the average rate was 3.05%.

And because of painful inflation, on Thursday it was announced that social security payments will rise by 8.7% in 2023. The cost of living adjustment is the largest implemented in four decades.

Tags: , , , , , ,

SIMONE DEL ROSARIO: MONTHLY INFLATION JUST KEEPS CLIMBING. SEPTEMBER CONSUMER PRICES OUT TODAY SOARED HIGHER THAN EXPECTED. A RISE OF 0.4% ON THE MONTH IS THE FASTEST PACE SINCE JUNE, AND PUTS OVERALL ANNUAL INFLATION AT 8.2%, JUST A HAIR LOWER THAN AUGUST, AND A HAIR ABOVE WHERE ECONOMISTS EXPECTED. MONTHS AGO, WE COULD BLAME FOOD AND ENERGY FOR A LOT OF INFLATION, BUT HERE’S A HEADLINER FOR YOU. STRIP FOOD AND ENERGY OUT OF THE MIX, AND CORE INFLATION IN SEPTEMBER WAS AT 6.6%, THE LARGEST ANNUAL PRICE INCREASE IN FOUR DECADES. THE SHELTER INDEX IS HELPING DRIVE THAT, ALSO AT 6.6%. A FEW AREAS DID SEE PRICE DECLINES, ENERGY PRICES CONTINUE TO EASE, ALONG WITH USED CARS. WHILE APPAREL AND PRESCRIPTION DRUGS FELL SLIGHTLY LAST MONTH. BUT THIS INFLATION IS PROVING STUBBORN IN SPITE OF MONETARY SQUEEZES BY THE FED, WHICH IS EXPECTED TO CONTINUE AGGRESSIVELY HIKING RATES. MEANWHILE, BECAUSE OF PAINFUL INFLATION, SOCIAL SECURITY PAYMENTS WILL RISE BY 8.7% NEXT YEAR, THE LARGEST BOOST IN DECADES. I’M SIMONE DEL ROSARIO IN NEW YORK IT’S JUST BUSINESS.