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Prices in the US will remain high as inflation persists


According to a key indicator of inflation, September saw the highest prices in the United States in 13 years.

Key inflation indicator, 30-year high 1:01

(CNN Business) -

Inflation in the United States is still much higher than anyone would want: consumers, the White House, the Federal Reserve ... In September, prices remained high, returning to a high of 13 years after dropping a bit in August.

Consumer price inflation, one of the key indicators of inflation, rose 0.4% in September, adjusted for seasonal changes, faster than in August but slower than in previous months, the Bureau of Labor Statistics.

Rising food and housing prices contributed to more than half of this increase, while prices for new cars, home furnishings and auto insurance also rose.

The index that captures new car prices rose 8.7% in the 12 months ending in September, the largest increase since 1980.

Rising housing costs, which include rents and homeowner's equivalents, are concerning, said economist Sung Won Sohn.

Home rental prices rise in the US 1:10

"Housing costs increased little last year, but they continue to rise," he wrote in a note.

"The government will gradually introduce rent increases over time. It is poised to become a major source of inflation in the coming months."

Overall, inflation stood at 5.4% in the 12-month period ending in September.

If food and energy costs, which tend to be more volatile, are excluded, prices rose 4% in the same period, the same rate as in August.

America's annual inflation rate is the highest since the summer, which had equaled the highest annual inflation rate since 2008.


More expensive food and cheaper plane tickets

Food prices rose 0.9% in September, much more than in August, as grocery store prices rose across the board.

But not everything became more expensive in the United States.

Airline tickets, for example, are still cheaper: the airfare price index fell 6.4% in September, after a 9.1% decline in August.

That's not a good thing for airlines, and it happens even as travel demand continues to rebound from the worst of the pandemic.

Delta said in its earnings presentation Wednesday that the company expected to feel price pressure from rising energy costs.

Energy prices rose 1.3% last month, the fourth consecutive increase.

Gas prices rose 1.2%, less than the previous month.

In the last 12 months, the energy price index rose almost 24.8% and that of gas 42.1%.

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With increased volatility in the energy market this month, and U.S. oil prices soaring above $ 80 for the first time in nearly seven years earlier this week, energy prices Energy could contribute more to inflation in October.

What does this mean for the Fed?

Inflation has been above the Federal Reserve's target of around 2% for a long time.

Still, the central bank has been adamant in its view that the price increases that have become a hallmark of the pandemic economy will be temporary.

For consumers, it does not appear to be the case.

Prices for various products skyrocketed last year - remember the huge spike in used car prices?

- and have since dropped from their highs.

But overall, costs remain high this year.

Is the price increase in the US temporary?


So is the Federal Reserve wrong in its assessment?

Is very soon to know it.

While American workers have long felt price pressure during the pandemic, not enough time has passed for Fed lawmakers to really sound the alarm.

That said, the Fed has signaled that it is preparing to reduce its massive anti-pandemic stimulus package.

This could bring inflation down a bit in the United States, but much of the pressure on prices comes from supply chain problems lurking around the world.

The White House has stepped in to address some of the supply chain issues, and President Joe Biden met with senior officials and key players to discuss efforts to address global transportation bottlenecks.

Biden spoke about it in a speech Wednesday afternoon.


Source: cnnespanol

All news articles on 2021-10-13

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